US STOCKS-Wall St hovers at highs; profit-taking eyed

* VIX hits lowest level since April

* Nasdaq helped by strong results from Oracle, RIM

* Regional banks up after Marshall & Ilsley deal;

* Dow off 0.1 pct, S&P up 0.1 pct, Nasdaq up 0.2 pct

* For up-to-the-minute market news see [STXNEWS/US]
(Updates to close)

By Edward Krudy

NEW YORK, Dec 17 (BestGrowthStock) – The S&P clung to a two-year
high on Friday as investors predicted a pause as volumes are
expected to dry up in the days ahead, and after a 5 percent
gain already so far in December.

The last two weeks of the year are traditionally quiet, and
therefore market moves are less meaningful to the overall
trend, which took the S&P 500 to a two-year high early this
week.

Some indicators imply investors have grown complacent. The
CBOE Volatility index (.VIX: ), a measure of expected volatility
on Wall Street, fell to its lowest level since April, dropping
7.4 percent to 16.11.

“The bullish camp is — I’m sure — very pleased at the
day-after-day, slow steady increase they are engineering,” said
Larry McMillan, president of options research firm McMillan
Analysis in a research note. “But below the surface, tensions
are building, and they will likely explode to the downside in a
sharp, but perhaps only short-lived, correction.”

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.

Some of the year’s biggest winners have endured selling of
late and were down again Friday. Apple Inc (Read more about Apple stock future.) (AAPL.O: ) fell 0.2
percent to $320.61, while Salesforce (CRM.N: ) fell 0.7 percent
to $136.50.

This was offset on the Nasdaq by gains in both Oracle Corp
(ORCL.O: ) and Research in Motion (RIMM.O: ) (RIM.TO: ) a day after
they posted strong quarterly results. Oracle gained 3.9 percent
to $31.46 while U.S.-listed shares of RIM were up 1.6 percent
to $60.20. [ID:nN16257524] and [ID:nN1794135]

The Dow Jones industrial average (.DJI: ) dropped 7.34
points, or 0.06 percent, to 11,491.91. The Standard & Poor’s
500 Index (.SPX: ) gained 1.03 points, or 0.08 percent, to
1,243.90. The Nasdaq Composite Index (.IXIC: ) rose 5.66 points,
or 0.21 percent, to 2,642.97.

While traders and investors were already nervous after the
S&P 500 rallied over 5 percent so far this month, old concerns
over European debt also resurfaced, with Moody’s downgrade of
Ireland’s ratings hitting European bank shares in U.S. trade.

U.S.-listed shares of Banco Santander (STD.N: ) fell 2
percent to $10.52 while Royal Bank of Scotland (RBS.N: ) dropped
5.5 percent to $11.90. 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 18 percent to $6.85.
[ID:nN1744360]

Peer regional bank KeyCorp (KEY.N: ) climbed 4.1 percent to
$8.42 while Regions Financial (RF.N: ) added 1.8 percent to
$6.24. [ID:nN1744360]

The KBW Regional Banks index (.KRX: ) rose 0.3 percent and
has risen more than 11 percent this year, with most of that
coming 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, according to Thomson Reuters data. [ID:nLDE6BE0QQ] and
[ID:nN16241182]

About 8.9 billion shares were traded on the New York Stock
Exchange, the American Stock Exchange and the Nasdaq, over the
year’s daily average of 8.5 billion.

Volume was increased by traders adjusting or exercising
derivative positions on four different types of expiring equity
futures and options contracts, also know as “quadruple
witching.”

(Reporting by Edward Krudy; Additional reporting by Doris
Frankel; Editing by Chizu Nomiyama)

US STOCKS-Wall St hovers at highs; profit-taking eyed