* Moody's downgrades Ireland by five notches
* Nasdaq helped by strong results from Oracle, RIM
* Canada's BMO to buy Marshall & Ilsley for $4.1 bln
* Dow off 0.03 pct, S&P up 0.2 pct, Nasdaq up 0.5 pct
* For up-to-the-minute market news see []
(Updates to late afternoon)
By Edward Krudy
NEW YORK, Dec 17 (Reuters) - U.S. stocks continued to hover
at near multi-year highs on Friday as traders tried to gauge
how far markets can grind higher before taking profits on the
current rally.
With traders and investors already nervous after the S&P
500 rallied over 5 percent so far this month, old concerns over
European debt resurfaced with Moody's downgrade of Ireland's
ratings hitting European bank shares in New York.
Some indicators are pointing to an overbought market such
as high levels of bullishness, often seen as a contrarian
indicator, as well as a high call to put ratio, indicating
investors may be complacent about hedging a fall in prices.
The CBOE Volatility index <.VIX>, a measure of expected
volatility on Wall Street, fell 10 percent and hit its lowest
level since April.
"The market is overbought and over bullish, we're in
positive seasonal trends, there's still no real sellers," said
Wayne Kaufman, chief market analyst at John Thomas Financial in
New York. "Some people may want to take those profits ahead of
the end of the year."
Helping the Nasdaq, shares of both Oracle Corp <ORCL.O> and
Research in Motion <RIMM.O> <RIM.TO> rallied a day after they
posted strong quarterly results. Oracle also issued an upbeat
forecast. Oracle gained 5 percent to $31.80 while U.S.-listed
shares of RIM were up 2.4 percent to $60.65. []
and []
The Dow Jones industrial average <> dropped 3.90
points, or 0.03 percent, to 11,495.35. The Standard & Poor's
500 Index <.SPX> gained 2.20 points, or 0.18 percent, to
1,245.07. The Nasdaq Composite Index <> gained 12.18
points, or 0.46 percent, to 2,649.49.
U.S.-listed shares of Banco Santander <STD.N> fell 2
percent to $10.53 while Barclays <BCS.N> dropped 2.2 percent to
$16.22. However, the impact on U.S. shares not directly linked
to the Irish situation were limited.
"There are more shoes to drop in Europe, but precedent has
been set to help these countries. That's why equity markets
aren't reacting significantly negatively to the news," said
Michael Gault, a senior portfolio strategist at the New
York-based Weiser Capital Markets, which has about $150 million
in assets under management.
"Unless that support won't be there, I think investors will
in general be able to shake off the news and find positives,
like the tech results," he added.
Regional banks traded higher after Canada's Bank of
Montreal <BMO.TO> agreed to buy Marshall & Ilsley Corp <MI.N>
for $4.1 billion, sending the stock up nearly 18 percent to
$6.81. []
Peer regional bank KeyCorp <KEY.N> climbed 4 percent to
$8.41 while Regions Financial <RF.N> added 4 percent to $6.38.
[]
The KBW Regional Banks index <.KRX> rose 0.7 percent and
has risen more than 13 percent this year, including a gain of
more than 12 percent in December alone despite continued debt
woes from European banks.
Mergers and acquisitions are up for the first full year
since 2007 and may mark the start of a new, multiyear M&A
cycle, with emerging economies accounting for a bigger share of
global dealmaking, according to Thomson Reuters data.
[] and []
Market volume and volatility could increase later in the
day as traders adjust or exercise derivative positions on four
different types of expiring equity futures and options
contracts, also know as "quadruple witching."
(Reporting by Edward Krudy; Editing by Chizu Nomiyama)
