Stocks come back from Irish jitters

Updated: 9:45 p.m. ET

Stocks rebounded off their lows of the day, but weakness in financial shares kept the Dow Jones industrials ($INDU) and the Standard & Poor's 500 Index ($INX) from recovering on the day.

Strength in technology stocks allowed the Nasdaq Composite Index ($COMPX) to push into positive territory.

Financials were weak because of worries about the European financial system and uncertainty created by what appears to be a broad probe in insider trading.

The Dow closed down just 25 points to 11,179. The S&P 500 was off just 2 points to 1,198. The Nasdaq was up 14 points to 2,532.

After the close, Hewlett-Packard (HPQ) shares were moving higher after the personal-computer giant beat estimates on fiscal-fourth-quarte​r results and boosted guidance for the first fiscal quarter and the 2011 fiscal year.

HP earned $1.33 a share, up 16.7% from a year-ago's $1.14 and ahead of the Street estimate of $1.27. Revenue was up 8.2% to $33.28 billion and ahead of the consensus estimate of $32.75 billion.

For the first quarter, HP expects revenue of $32.8 billion to $33 billion. That's ahead of the consensus estimate of $32.74 billion.

Shares of the Dow component were up 2.9% to $44.50 after hours. They had closed up 1.8% to $43.25 in regular trading.

 

Due Tuesday are an update on third-quarter economic growth and the National Association of Realtors' October report on existing-home sales. Quarterly results include earnings from Campbell Soup (CPB) and Cracker Barrel Old Country Store (CBRL).

Futures trading suggests stocks are headed to a modestly lower open.

 

Energy prices -- New York close
			Mon.			Fri.			Month chg.			YTD chg.
Crude oil			$81.74			$81.98			0.38%			3.00%
(per barrel)
Heating oil			$2.2686			$2.2744			1.38%			7.23%
(per gallon)
Natural gas			$4.2710			$4.1640			5.77%			-23.35%
(per mil. BTU)
Unleaded gasoline			$2.1519			$2.1960			4.49%			4.82%
(per gallon)
Retail gasoline			$2.8720			$2.8750			2.35%			8.94%
(per gallon; AAA)

An ugly sell-off quickly finds a bottom
A midmorning sell-off had pushed the Dow down as many 149 points and the S&P 500 15 points before a rebound kicked in. Technically oriented traders noted that the buying was set off when the S&P 500 hit 1,184. The index closed around that level consistently between Oct. 18 and Nov. 1.

The sell-off occurred because investors did not appear to be thankful for the one thing they wanted last week: at least a temporary solution to the Irish debt problem.

The Irish government has asked the European Central Bank and the International Monetary Fund for billions of dollars of help to support its ailing banking system.

Tech stocks, especially Apple (AAPL), helped the Nasdaq and helped support Hewlett-Packard.

Apple was up 2.2% to $313.36, contributing more than 9 points to a 16-point gain for the Nasdaq-100 Index ($NDX.X), which tracks the largest Nasdaq stocks. The index closed at 2,151, up 0.7%.

The U.S. dollar rose against the euro, forcing crude oil and copper lower. Crude oil for January delivery settled down 24 cents to $81.74. It had been down to as low as $80.59. Copper settled down 8.2 cents to $3.752 a pound. Gold was up $5.50 to $1,357.80 an ounce.

Interest rates were lower, with the 10-year Treasury yield falling to $2.813% from 2.895% on Friday.

Banks lead the S&P 500 lower
Only seven of the 30 Dow stocks were higher today, led by Hewlett-Packard. Four of the 10 sectors of the S&P 500 were higher, led by consumer discretionary stocks including Best Buy (BBY), up 3% to $44.86.

Also higher: Nordstrom (JWN), Macy's (M) and American Eagle Outfitters (AEO).

Financial and energy stocks were among the worst-performing sectors. The S&P 500 financial sector index was off 1.4% to 197. The S&P 500 Financial Sector exchange-traded fund (XLF) was off 1.4% to $14.64.

Bank of America (BAC) was off 3.1% to $11.30. JPMorgan Chase (JPM) was down 2.3% to $38.51.

Mostly, the declines were due to worries about how the Irish situation might affect banks in other countries. Deutsche Bank (DB), Barclays (BCS), Societe Generale (SCGLY) and other big European financial were all down as well.

Energy shares slumped as oil moved lower. ExxonMobil (XOM) was off 0.5% to $70.19. Diamond Offshore Drilling (DO) fell 2% to $67.53. Schlumberger (SLB) was off slightly to $76.40.

Goldman Sachs slumps on insider-trading probe
Goldman Sachs (GS) was off 3.4% to $161.05 after The Wall Street Journal reported this weekend that the investment house is a focal point a three-year investigation into possible insider-trading networks.

Sources told the Journal that the Securities and Exchange Commission and other federal officials are nearing the end of the probe, which includes determining whether Goldman Sachs bankers divulged information about health care acquisitions and other transactions.

Earlier today, FBI agents raided the Connecticut offices of hedge funds Diamondback Capital Management  and Level Global Investors amid a far-reaching insider-trading investigation, the Journal said.

The hedge funds are run by former managers of Steve Cohen's SAC Capital Advisors.

Level Global Investors is a Greenwich, Conn., hedge-fund firm run by David Ganek, a former SAC Capital trader and art collector. He started Level Global in 2003 and earlier this year reported managing about $4 billion in assets.

Diamondback Capital Management, founded in 2005, is managing $5 billion in assets.

Agents also apparently search the office of a Boston hedge fund, Loch Capital Management.

After an Irish bailout, what next?
The problem is support for Ireland does not equal a long-term solution, and there's unease building that the the long-term solution may prolong the pain of the slow economic recovery.

And the greater fear is that the Irish problem will spread to Portugal and Spain. 

Along with Greece, those three countries saw property values soar, then bust, just as they did in the United States. The Irish government agreed to backstop Irish bank losses. Speculators have been shorting Irish government bonds out of confidence that the government doesn't have the resources to cover the bank losses.

Ireland, once among the hottest European economies, has been in a deep recession and anecdotal evidence is growing that many Irish residents are leaving the country to look for work. Australia is a popular destination.

Stocks making moves
While the market was lower, here are some stocks that made moves today:

• Cirrus Logic (CRUS), up 14.9% to $15.88. The supplier of parts for Apple’s iPhone and iPad was raised to "buy" from "hold" by Jefferies & Co.
• Green Mountain Coffee Roasters (GMCR), up 18.2% to $35.78. The seller of Keurig single-cup brewers was raised to "buy" from "underperform" by Bank of America/Merrill Lynch analyst Bryan Spillane because of increased earnings potential and clarity on the SEC's inquiry into the company’s accounting practices.
• Netflix (NFLX), up 8.8% to $188.32. The mail-order and online movie-rental service introduced its first streaming-only subscription plan in the U.S. for customers to watch movies and TV shows online for $7.99 a month.
• Novell (NOVL), up 6.6% to $5.96, tops among S&P 500 stocks. Privately held Attachmate said it plans to acquire the network software maker for $6.10 a share. Novell valued the deal at about $2.2 billion.
• Regeneron Pharmaceuticals (REGN), up 19.7% to $29.53. The drug maker and Bayer's (BAYRY) experimental drug for wet age-related macular degeneration, a cause of vision loss in the elderly, worked as well as Roche Holding's (RHHBY) Lucentis with fewer doses. Bayer was off 1.4% to $77.90 in New York; Roche dropped 1.4% to $36.25.
• SanDisk (SNDK), up 6.5% to $42.57, second-best among S&P 500 stocks. The biggest maker of flash-memory cards was increased to "outperform" from "neutral" by Robert W. Baird.

Short hits from the markets -- New York close
			Mon.			Fri.			Month chg.			YTD chg.
Treasury yields
13-week Treasury bill			0.130%			0.130%			8.33%			160.00%
5-year Treasury note			1.433%			1.512%			21.54%			-46.65%
10-year Treasury note			2.813%			2.895%			7.70%			-26.80%
30-year Treasury bond			4.209%			4.255%			5.23%			-9.13%
Currencies
U.S. Dollar Index			78.768			78.594			1.69%			0.70%
British pound			$1.5957			$1.5964			-0.61%			-1.36%
(in U.S. $)
U.S. $ in pounds			£0.6267			£0.6264			0.61%			1.37%
Euro in dollars			$1.3615			$1.3630			-2.49%			-5.01%
(in U.S. $)
U.S. $ in euros			€ 0.7345			€ 0.7337			2.56%			5.27%
U.S. $ in yen			83.47			83.26			3.17%			-10.24%
U.S. $ in Chinese			6.67			6.64			-0.39%			-2.31%
yuan
Canada dollar			$0.982			$0.982			-0.11%			3.23%
(in U.S. $)
U.S. dollar			$1.019			$1.018			0.11%			-3.13%
(in Canadian $)
Commodities
Gold			$1,357.80			$1,352.30			0.01%			23.86%
(per troy ounce)
Copper			$3.7515			$3.8335			0.48%			12.10%
(per pound)
Silver			$27.4610			$27.1790			11.79%			63.02%
(per troy ounce)
Wheat			$6.4550			$6.4450			-10.00%			19.21%
(per bushel)
Corn			$5.1525			$5.4175			-11.47%			24.31%
(per bushel)
Crude oil			$81.74			$81.98			0.38%			3.00%
(per barrel)