U.S. stocks fell this week, led by banks, amid concern that an Irish financial bailout will fail to stem Europe’s debt crisis, China will raise interest rates to cool inflation and the Korean peninsula conflict will escalate. “Those things paint a pretty grave image,” said Peter Sorrentino, who helps oversee $13.8 billion at Huntington Asset Advisors in Cincinnati. “They serve to keep the real fundamental investors on the sidelines because they’re reasons not to take a risk.” JPMorgan Chase & Co. and Bank of America Corp. led declines in the Dow Jones Industrial Average, both losing more than 4.6 percent, after Ireland became the second euro country to seek a rescue as the cost of saving its banks threatened a rerun of the Greek debt crisis. Hewlett-Packard Co. limited losses for the benchmark, rising after its profit forecast exceeded estimates. The Standard & Poor’s 500 Index slid 0.9 percent this week to 1,189.40 as 8 of 10 industry groups declined. The Dow lost 1 percent to 11,092, with 25 of its 30 companies falling. Both equity gauges are up more than 6.3 percent this year. Financial companies led the S&P 500 lower, losing 2.5 percent for the biggest decline among 10 industry groups. S&P Ratings Services lowered the long-term counterparty credit rating on Irish banks including Allied Irish Banks Plc and Bank of Ireland Plc. Bank of America, the largest U.S. bank by assets, fell 4.6 percent to $11.12. JPMorgan, the second-biggest, slid 4.8 percent to $37.50. Citigroup Inc. decreased 3.7 percent to $4.11. Korean Clashes The S&P 500 posted its biggest drop of the week on Nov. 23, losing 1.4 percent after fighting broke out among North and South Korea. North Korea shelled a South Korean island near the disputed border between the two countries, killing two soldiers in the worst attack on its neighbor in at least eight months. China’s government in the past month has stepped up a campaign to limit credit expansion after inflation quickened and property prices surged. China’s biggest banks are poised to reach government-set caps on lending and plan to stop expanding their loan books to avoid exceeding the annual quotas, four people with knowledge of the matter said this week. “If you take those things together you’ve got headline- grabbing negatives in China, Ireland and Korea,” said Stephen Wood, the New York-based chief market strategist for Russell Investments, which manages $149 billion. “They’ve drowned out the positives of improving employment numbers and corporate earnings in the U.S.” Hewlett-Packard, the world’s largest computer maker, advanced 1.7 percent to $43.20. The Palo-Alto, California-based company forecast first-quarter profit that exceeded analysts’ estimates as corporations step up buying of personal computers, printers, servers and networking gear. Monster Rallies Monster Worldwide Inc., operator of the www.monster.com job-search site, gained 17 percent to $23.18 for the biggest jump in the S&P 500 after a Labor Department report showed a drop in applications for unemployment benefits. Jobless claims last week fell by 34,000 to 407,000, the lowest level since July 2008. The benchmark index for U.S. stock options rose the most since May. The VIX, as the Chicago Board Options Exchange Volatility Index is known, increased 23 percent to 22.22. The index, which measures the cost of using options to protect against S&P 500 declines, has rebounded from a six-month low of 18.04 last week. The Treasury will sell $29 billion in three-month and $28 billion in six-month bills on Nov. 29. They yielded 0.15 percent and 0.21 percent, respectively, in when-issued trading. To contact the reporter on this story: Jeff Kearns in New York at jkearns3@bloomberg.net. To contact the editor responsible for this story: Michael Regan in New York at mregan12@bloomberg.net.

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