Stocks Finish Mixed as Tech Rallies
NEW YORK (TheStreet) -- Stocks finished Monday mixed as a recovery in tech and small-cap stocks in the final hour of trading supported a healthy bounce off session-lows.
The Dow Jones Industrial Average finished down 25 points, or 0.2%, at 11,179. Earlier in the session, the blue-chip index was off more than 100 points, scraping a low of 11,054. The S&P 500 dipped 2 points, or 0.1%, to 1197 while the Nasdaq Composite staged a strong comeback in the second half of the session to finish higher by 14 points, or 0.5%, at 2532.
Stocks began Monday on a weak note as investors worried that the eurozone debt crisis might spread beyond Ireland.Investors were also feeling jittery following reports from the Wall Street Journal that federal officials are investigating alleged insider trading rings involving hedge funds, analysts and investment bankers. On Monday, the Wall Street Journal reported that the FBI raided the Connecticut offices of three hedge funds -- Diamondback Capital Management LLC , Level Global Investors LP and Loch Capital Management. Goldman Sachs (GS) in particular was hit hard. Its stock shed 3.3% to $161.04 on reports that it was being investigated for allegedly leaking information on healthcare deals. The financial sector was the session's weakest following a Barclays Capital (BCS) analysis that found large U.S. banks may face an equity capital shortfall of as much as $150 billion once new Basel capital standards are put in place. JPMorgan Chase (JPM) and Bank of America (BAC) were the Dow's biggest laggards. Global banks were also sharply lower with the Bank of Ireland (IRE) among the worst hit, dropping 16.8% to close at $2.22. Allied Irish Banks' (AIB) New York-listed stock shed 9.8% at $1.11. Tech stocks were the session's strongest performers ahead of Hewlett Packard's (HPQ) quarterly results. After the bell, HP announced that its profits adjusted for items grew 17% to $1.33 per share beating estimates by 6 cents. The stock was rising 1% in extended trading. Over the weekend, Ireland formally requested bailout funds from the European Union and International Monetary Fund to bolster its banking system. Although the exact size of the loan package is still being worked out, it's said to be in the range of €80 billion to €90 billion ($109 billion to $123 billion), prompting Moody's Investors Service to say that it may downgrade Ireland's credit rating by several notches since the package will increase the country's debt. The euro fell against the dollar to $1.3605 from $1.3685 on Friday, and the dollar traded higher against a basket of currencies with the dollar index up by 0.2%. The FTSE in London lost 0.9% Monday, and the DAX in Frankfurt shed 0.3%. Hong Kong's Hang Seng dipped 0.4% lower, while Japan's Nikkei rose 0.9%. Marc Pado, U.S. market strategist at Cantor Fitzgerald, said the backlash seen across markets on Monday was related to investors' fears that the move would set a precedent for other eurozone countries bogged down by debt such as Greece, Portugal and Spain.
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