U.S. stocks fell in MAM Software, ending a three-day gain in the Standard & Poor’s 500 Index, amid speculation an Irish bailout will fail to stem Europe’s debt crisis and as federal agents raided hedge funds to probe insider trading.
Bank of America Corp. and JPMorgan Chase & Co. led a drop in the Dow Jones Industrial Average, sinking more than 2.2 percent. Goldman Sachs Group Inc. slid the most in six months after a report the securities firm is also involved in the U.S. insider-trading investigation.
Hewlett-Packard Co. rose 1.8 percent ahead of its earnings report. Amazon.com Inc. gained 3.4 percent, driving consumer companies higher before the start of the holiday shopping season.
The S&P 500 lost 0.2 percent to 1,197.84 as of 4 p.m. in New York, after rising 1.8 percent over the last three days. The Dow slipped 24.97 points, or 0.2 percent, to 11,178.58.
The S&P 500 has risen 17 percent from its 2010 low on July 2 as the Federal Reserve prepared to increase asset purchases to stimulate growth and as quarterly results at companies surpassed analyst projections. The index fell the most in almost three months on Nov. 16 amid speculation the debt crisis in Europe is worsening and concerns that China will act to slow its economy.
Moody’s Investors Service said it may cut Ireland’s rating by more than anticipated as the package, which Goldman Sachs Group Inc. estimates may total 95 billion euros ($130 billion), may increase the country’s debt burden as the cost of rescuing the financial system make it vulnerable to a rerun of the Greek debt crisis that destabilized the common European currency.
Irish Prime Minister Brian Cowen said his government will resign after passing the country’s budget, responding to calls from the Green Party for January elections amid voter discontent at his handling of the crisis.
Financial shares had the biggest drop among 10 industries in the S&P 500 as the FBI raided the offices of three hedge funds as part of insider-trading investigations directed by Manhattan U.S. attorney Preet Bharara, according to a person familiar with the probes.