US stocks close down, but finish well off their session lows, as bank shares suffered amid concerns about a broad insider-trading probe.
DJIA, which dropped as much as 149 points, finished off 25 (0.2%) at 11179, its first decline in three days. S&P 500 falls 2 (0.2%) to 1198. Financials lead the drop, but tech and consumer discretionary finished in positive territory, muting the index’s overall losses. Nasdaq Comp gains 14 (0.6%) at 2532, its fourth-straight gain.
WSJ reports FBI raided three hedge funds amid its insider-trading investigation, which added to jitters surrounding financial sector. Ireland agrees to bailout package, but worries intensify about rest of euro-zone’s mounting debt.
Something else to consider — David Rosenberg offers his latest gloom-and-doom warning. Dow Jones’s Min Zeng reports:
US economic growth will be “extremely disappointing” in 2011, with risks of deflation. Rosenberg, chief economist at Gluskin Sheff, argues the US has passed the peaks of the economic cycle and fiscal stimulus and noted there are fresh headwinds ahead. He says safe-haven Treasury bonds provide better value than US stocks, and especially favors 30-year Treasurys. He highlights the spending cuts from state and municipal governments, the second-largest contributor to US gross domestic product after consumer spending. Rosenberg expects the 30-year bond’s yield to fall to 2.5% to 2.75% by the end of 2011.
Meanwhile, Dow Jones reporter Kristina Peterson explains why stocks ended mixed, with bank stocks dragging down the Dow, while the Nasdaq moved higher. Check her News Hub segment here: