Shawshank, VA 9/12/2011 (PennyPayDay) – U.S. stocks trimmed early losses to trade flat on Monday as European bank shares recovered and technology stocks regained their footing.The market opened weakly with all three major indexes down more than 1 percent on worries of a credit rating downgrade of French banks and the lack of a solution to Greece's debt problem.
"The move this morning is a case of investors responding very quickly. The bottom line is that the S&P is a good global hedge, and we saw something of a recovery in European banks," said Andrew Wilkinson, senior market analyst at Interactive Brokers Group in Greenwich, Connecticut.
The Dow Jones industrial average was down 21.60 points, or 0.20 percent, at 10,970.53. The Standard & Poor's 500 Index was up 0.16 points, or 0.01 percent, at 1,154.39. The Nasdaq Composite Index was up 11.79 points, or 0.48 percent, at 2,479.78.
Gains in the tech heavy Nasdaq index were boosted by NetLogic Microsystems Inc (Nasdaq:NETL), which jumped 50 percent to $47.88 after wireless chipmaker Broadcom Corp (Nasdaq:BRCM) agreed to buy the company for about $3.7 billion.
Broadcom will pay $50 per share for each NetLogic share, a premium of 57 percent over NetLogic's Friday close of $31.91 on Nasdaq. Broadcom shares were down 0.8 percent at $33.17.
France's top banks are bracing themselves for a likely credit rating downgrade from Moody's, sources close to the situation said, further complicating their efforts to assure investors they are riding out the tensions in funding markets.
Concerns that the credit crisis in Europe may threaten to spill over into U.S. banks have been pressuring Wall Street for several months, sending shares of major banks to their historical lows in recent weeks.
Investors were also unsettled by the failure of the weekend's meeting of finance ministers from the Group of Seven industrialized nations to come up with any fresh proposals for boosting global growth.
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