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US stocks end mixed...Banks fall

Also, the euphoria over Ireland finally seeking a financial bailout faded amid persistent worries that the rescue may not prevent the spread of the debt contagion among the other eurozone nations.

November 23, 2010 9:16 IST | India Infoline News Service

US blue chip stocks and the broader market came off session lows to end marginally lower with banks under pressure amid reports of a federal probe into insider trading charges against Goldman Sachs and a couple of hedge funds. 


Also, the euphoria over Ireland finally seeking a financial bailout faded amid persistent worries that the rescue may not prevent the spread of the debt contagion among the other eurozone nations.


The Dow Jones Industrial Average closed down 24.97 points, or 0.22%, at 11,178.5. The index had been down by more than 100 points earlier in the day as investors worried over the stability of the euro zone. 


The declines in the Dow were broad-based, with 22 of 30 Dow components ending in the red.


The Standard & Poor’s 500 Index shed 1.89, or 0.16%, to 1,197.84. 


The Nasdaq Composite Index edged up 0.1% to 2,520. 


The tech-heavy index was boosted by a 6.6% jump in Novell Inc. An investor group reached a deal to acquire Novell for about $2.2 billion, ending an eight-month takeover battle for the software company. 


Financials were the worst-performing sector in the S&P 500 index. 


The dollar index, which tracks the US currency against a basket of six others, rose 0.2%. 


The price on the benchmark 10-year US Treasury rose, pushing the yield down to 2.81% from 2.88% late Friday.


Crude oil for January delivery fell 24 cents, or 0.3%, to settle at $81.74 a barrel.


Gold futures for December delivery turned around from earlier losses and added $5.50 to settle at $1,361.70 an ounce.


Stoking fresh worries for the financial sector, The Wall Street Journal reported that Federal Bureau of Investigation (FBI) agents raided the offices of three hedge funds, Diamondback Capital Management LLC, Level Global Investors LP and Loch Capital Management LLC, amid a far-reaching insider-trading investigation. 


Bank of America was the Dow's biggest loser, dropping 3.1%. Other bank shares - including Citigroup, JP Morgan Chase and Wells Fargo - also ended sharply lower.


Goldman Sachs was the S&P 500's laggard, with shares tumbling 3.4% following a weekend report that investigators are looking at possible insider trading allegations tied to the firm's dealings in transactions including a health-care merger.


Trading could be choppy this week, with many market participants taking time off ahead of the Thanksgiving holiday on Thursday. Wall Street will be open for only half a day on Friday.


Trading volume was on the light side on Monday, but still within normal range. Below average trading volume can contribute to volatility.


The rest of the week brings a raft of economic indicators: a revised reading on third quarter GDP, housing data and durable goods orders, as well as personal income and spending figures.


On Sunday, Irish Prime Minister Brian Cowen formally requested substantial financial assistance from the European Union (EU) and the International Monetary Fund (IMF). The group is now working to hammer out final details of a rescue package worth tens of billions of dollars.


US stocks pared losses after Irish Prime Minister Brian Cowen said that he would call for the dissolution of parliament in the new year after a vital budget vote Dec 7.


Netflix shares jumped to end 8.8% higher after the company announced a streaming-only video service for $7.99 a month. The streaming plus DVD rental service price will increase to $9.99 a month.


Green Mountain Coffee announced late on Friday that it will restate earnings for the last three fiscal years and the first three quarters of the current fiscal year, because of accounting errors. Shares surged more than 18% Monday after the company said those issues had been resolved.


Novell shares closed 6.6% higher after the software maker said it had agreed to be bought by Attachmate for $2.2 billion.


After the close of trade, Dow component Hewlett-Packard posted fiscal fourth-quarter earnings of $1.33 per share. Sales rose 8% to $33.3 billion, topping analysts' forecasts of $32.8 billion. Shares rose 1% in after-hours trade. 



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