MarketView for November 22

Summary 

For all practical purposes, this week is really a three day week and you can look for low volume and high volatility as many of the Street’s traders and money managers disappear as we get closer to Thursday.

Meanwhile, bank shares were not the place to be on Monday as Europe's debt crisis and fears of an insider trading probe in the United States reduced interest in equities. Worry about a broad insider trading probe in the United States hit shares of large brokerages, with the result that Goldman Sachs closed down 3.4 percent at $161.05.

Risk aversion kicked in as stocks followed the euro's fall against the dollar after turmoil in Ireland's fragile coalition government overshadowed an agreed-on bailout of the country. There is concern on the Street that the crisis will spread throughout Europe, raising the specter of losses by exposed banks. As a result, JPMorgan Chase closed down 2.3 percent at $38.51.

However, the Nasdaq fared better than the Dow Jones industrial average and the S&P 500 indexes after upgrades materialized for SanDisk, Amkor Technology and Teradyne. In the regular session, SanDisk gained 6.5 percent to $42.57 after Robert W. Baird upgraded the stock to "outperform" from "neutral," while Amkor jumped 6 percent to $6.86 and Teradyne added 5.7 percent to $12.53 after Citigroup raised its rating on both sets of shares.

With relative momentum and strength readings near overbought levels, a pullback in the sector is in the charts. However, the uptrend is still in place.

Ireland's unpopular coalition government began to crumble a day after agreeing on an European Union/International Monetary Fund bailout, casting doubt on its ability to push through an austerity budget crucial to receiving assistance. U.S.-listed shares of Bank of Ireland fell 16.9 percent to $2.22, and those of Allied Irish Banks Plc were down 9.8 percent to close at $1.11.

Shares of health insurers outperformed the broader market after new rules aimed at ensuring more customer dollars go toward medical care were finalized on Monday, ending a source of uncertainty for investors in the sector. Humana rose 4.1 percent to end the day at $58.34 and Coventry Health Care was up 3.1 percent at $26.58.

Domestic sweet light crude futures capped losses, trading at $81.72 per barrel after earlier falling below $81.

After the closing bell, Hewlett-Packard raised its fiscal 2011 revenue and earnings forecasts after solid computer and storage sales led to stronger-than-expected quarterly results. The company’s shares ended the day up 1.9 percent to close at $44.07 in extended trading after rising 1.8 percent to close at $43.25 during normal market hours.

Also adding to the Nasdaq’s positive note was Netflix, whose shares chalked up an 8.8 percent gain to close at $188.32 after the company said it will offer an unlimited streaming-only subscription plan in the United States and it raised prices in some of its plans.

Changing Fed Mandate Would Not Change Policy

The Federal Reserve would have undertaken its latest $600 billion Treasury debt purchasing program even if its sole responsibility was to maintain price stability, Minneapolis Fed President Narayana Kocherlakota said on Monday.

Some Republican lawmakers have recently called for a rewrite of the Fed's so-called dual mandate, under which the Fed has the twin goals of price stability and maximum employment.

Kocherlakota said the debate is "interesting," but removing the Fed's employment mandate would have had no impact on its decision to undertake quantitative easing. The inflation rate is so low that the Fed would have acted in the same manner anyway, he said.