The S&P has alternated gains and losses for seven days at the close and has kept to a tight range as markets watch for the latest news out of Europe.

Germany and France released a statement on Thursday saying leaders would now hold two summits to discuss the debt crisis, with a solution in place by Wednesday’s second meeting.

“The statement was enough for us to come off the lows, but there is still a long way to go,” said Robert Pavlik, chief market strategist at Banyan Partners LLC in New York.

Market anxiety remained elevated. The CBOE Volatility Index VIX .VIX, Wall Street’s “fear gauge,” rose more than 1 percent to near 35, extending gains after rising nearly 10 percent on Wednesday.

Supporting the market, U.S. economic data showed factory activity in the U.S. Mid-Atlantic region rebounded in October while a separate report showed U.S. jobless claims fell last week.

On the negative side, other data showed a drop in sales of existing-homes last month and only a small rise in a gauge of future growth.

Financial and materials stocks were the day’s top gainers. The S&P 500 financial sector index .GSPF rose 1.8 percent and materials .GSPM climbed 1 percent.

The Dow Jones industrial average .DJI ended up 37.16 points, or 0.32 percent, at 11,541.78. The Standard & Poor’s 500 Index .SPX was up 5.51 points, or 0.46 percent, at 1,215.39. The Nasdaq Composite Index .IXIC was down 5.42 points, or 0.21 percent, at 2,598.62.

Progress by EU leaders toward a solution is considered vital for Wall Street stocks to break out of their trading range.

The S&P 500 has struggled after reaching the top end of a two-month trading range at around the 1,230-1,250 level.

Investors are also closely watching the developing U.S. earnings season. According to Thomson Reuters data, of the 109 companies in the S&P 500 that have reported earnings, 70 percent have topped analysts’ expectations.

After the closing bell, Microsoft shares (MSFT.O) fell 0.5 percent to $26.87 following quarterly results. During regular trading Microsoft finished at $27.04, down 0.3 percent.

Ingersoll Rand Plc (IR.N) posted lower quarterly earnings, and its fourth-quarter profit forecast fell short of some Wall Street estimates, due to depressed housing and consumer markets, sending shares down 7.9 percent to $27.38.

Polycom Inc (PLCM.O) fell more than 25 percent to $16.33 and weighed on the Nasdaq after the videoconferencing company reported quarterly revenue well below market expectations. The NYSEArca networking index .NWX lost 1.8 percent.

Trading volume was about 7.8 billion shares on the New York Stock Exchange, NYSE Amex and Nasdaq, below this year’s daily average of about 8 billion.

On the NYSE, advancers beat decliners by a ratio of three to two, while on the Nasdaq, decliners beat advancers by a ratio of 12 to 11.

(Reporting by Angela Moon, Editing by Kenneth Barry)

The new details showed the cyber attack was more serious than previously thought, as Nasdaq OMX Group had said in February that there was no evidence the hackers accessed customer information.

It was not known what information the hackers might have stolen. The investigation into the attack, involving the FBI and National Security Agency, is ongoing.

“God knows exactly what they have done. The long term impact of such attack is still unknown,” said Tom Kellermann, a well-known cyber security expert with years of experience protecting central banks and other high-profile financial institutions from attack.

The case is an example of a “blended attack,” where elite hackers infiltrate one target to facilitate access to another. In March hackers stole digital security keys from EMC Corp’s RSA Security division that they later used to breach the networks of defense contractor Lockheed Martin Corp.

Nasdaq had previously said that its trading platforms were not compromised by the hackers, but they attacked a Web-based software program called Directors Desk, used by corporate boards to share documents and communicate with executives, among other things.

By infecting Directors Desk, the hackers were able to access confidential documents and the communications of board directors, said Kellermann, chief technology officer at security technology firm AirPatrol Corp.

Investigators have learned that hackers were able to spy on “scores” of directors who logged onto directorsdesk.com before the malicious software was removed, said Kellermann and another person familiar with the investigation who was not authorized to discuss the matter publicly.

It was still unclear how long Nasdaq’s system was breached before the attack was discovered last October.

A Nasdaq spokesman confirmed the investigation into the attack continues, but declined to give further details.

NSA HELPS NASDAQ

Executive Assistant FBI Director Shawn Henry said the financial services sector was losing hundreds of millions of dollars to hackers every year, and the attacks were increasingly “destructive” in nature.

“We know adversaries have full unfettered access to certain networks. Once there they have the ability to destroy data,” he told Reuters in a phone interview. “We see that as a credible threat to all sectors, but specifically the financial services sector.” Henry declined to comment on the Nasdaq attack.

U.S. Army General Keith Alexander, head of the National Security Agency and U.S. Cyber Command, said the NSA was working with Nasdaq to help protect its network against further attacks.

Alexander told security experts at a Baltimore conference that the United States was shoring up its defenses, but still had “tremendous vulnerabilities” to a growing number of increasingly destructive electronic attacks.

“Nation states, non-nation state actors and hacker groups are creating tools that are increasingly more persistent and threatening, and we have to be ready for that,” he said.

Amid a spate of high-profile cyber crimes, the Obama administration wants Congress to pass comprehensive cyber-security legislation that would increase the government’s ability to thwart the growing threat.

Alexander and other top officials held a classified meeting with lawmakers on Wednesday and Thursday to discuss the issue, according to sources familiar with the meeting.

Nasdaq CEO Robert Greifeld said in July that the exchange is under constant attack, requiring it to spend nearly a billion dollars a year on information security.

“As we sit here, there are people trying to slam into our system every day,” Greifeld said in the interview. “So we have to be ever vigilant against an ever-changing foe.”

(Reporting by Jim Finkle. Additional reporting by Jonathan Spicer in New York, Andrea Shalal-Esa in Baltimore and Diane Bartz in Washington. Editing by Tim Dobbyn, Tiffany Wu, and Bob Burgdorfer

In his first speech explicitly on the economic outlook since joining the Fed in 2009, Fed Governor Tarullo on Thursday said there was “ample room” for policymakers to do more. Tarullo said mortgage bond purchases should be on the table, a sentiment echoed by Boston Fed President Eric Rosengren in an interview with the Wall Street Journal on Wednesday.

Tarullo and Rosengren’s comments mark the first public discussion of the possibility of more mortgage bond purchases, which were a controversial part of the first round of quantitative easing in 2009.

Other Fed officials said on Thursday the Fed’s current policy stance is appropriate.

For his part, St. Louis Fed President James Bullard told reporters that with recent economic data looking better, “monetary policy is appropriately calibrated for this situation.” Cleveland Fed President Sandra Pianalto also said Fed policy actions were “appropriate.”

The remarks suggest a growing debate among Fed officials about how aggressively to support an economy that is not growing quickly enough to make a significant dent in an unemployment rate hovering around 9 percent.

Pianalto described the economic recovery as “painfully” slow and unlikely to gather pace soon, while Tarullo likened it to a “slogging through the mud and occasionally hitting stretches of dry pavement.”

“There is need, and ample room, for additional measures to increase aggregate demand in the near to medium term, particularly in light of the limited upside risks to inflation over the medium term,” said Tarullo, who as a Fed Governor has a permanent vote on monetary policy.

ONGOING HOUSING PROBLEMS

Because the ongoing housing problems are so central to the recession and the anemic nature of the subsequent expansion, the Fed should refocus its efforts on housing, Tarullo said.

“I believe we should move back up toward the top of the list of options the large-scale purchase of additional mortgage-backed securities,” he added. The Fed bought $1.25 trillion worth of mortgage-related debt, starting in 2009.

Given the controversial nature of mortgage bond purchases — some Fed officials criticize them as propping up a specific sector of the economy. JPMorgan economist Michael Feroli said he did not expect the Fed’s policy-setting Federal Open Market Committee to adopt this option anytime soon.

“Nonetheless, Tarullo’s speech does show that there is a relatively-silent faction on the FOMC that favors continued action to get the economy to grow faster,” he wrote in a note to clients.

“A faltering in growth or a decline in inflation could further embolden this faction.”

Tarullo said the effectiveness of an MBS purchase program could be improved by further action to help borrowers whose mortgages are worth more than their homes.

He suggested a government program that helps borrowers whose loans are backed by Fannie Mae and Freddie Mac which could be adjusted, but also said steps could be taken to help underwater borrowers whose loans are not guaranteed by the two government-controlled firms.

“Policy changes directed at this last, larger group of homeowners would have to be carefully designed so as not to transfer credit risk from private investors to the government, and could well require legislation,” he said.

The Obama administration and the regulator for Fannie Mae and Freddie Mac are expected to unveil new steps to help distressed homeowners in the next week or two, a senior congressional aide said on Thursday.

WAIT AND SEE

Bullard, who like Pianalto, does not have a vote on monetary policy this year, said the Fed should wait and see how policies it has put in place, including a recent decision to replace shorter-term securities it holds with longer-term ones, affect the economy before taking any further actions.

“Given that the tone of the data has been better in the last six weeks … then I think you probably want to get into next year before you start thinking about what you do on top of Operation Twist,” he said.

The Fed at its September meeting said it will replace $400 billion of short-term securities on its portfolio with longer term ones to push longer-term interest rates lower — which is known as Operation Twist. It will also replenish its holdings of mortgage-related debt to support the depressed housing market. Tarullo said Operation Twist, while helpful, was “by definition limited”.

Operation Twist was the latest in a long series of extraordinary steps to boost growth through a financial panic and deep contraction. The Fed cut rates to near zero almost three years ago and announced in August rates would likely stay that low through the middle of 2013. The central bank has also bought $2.3 trillion in securities to encourage borrowing.

Another Fed official, Minneapolis Fed President Narayana Kocherlakota said unemployment, which he described as “disturbingly high” now, would have been higher without the actions the Fed has taken.

(Additional reporting by Mark Felsenthal in St. Louis, Pedro da Costa in Washington, Larry Vellequette in Toledo, Ohio, David Bailey in Minneapolis and Ann Saphir in Chicago; editing by Bob Burgdorfer, Bernard Orr)

Shane Robison, 57, will step down on November 1, ending an 11-year term at the company, which is now pondering a sale or spinoff of its core personal computing division and trying to assure skeptical investors it can restructure to return to growth.

HP appointed former California gubernatorial candidate Meg Whitman CEO just last month, after firing former leader Leo Apotheker for a series of missteps, including a poor run at convincing Wall Street he had not overpaid for British software firm Autonomy Plc.

Robison, a pivotal figure in crafting long-term strategy for the largest U.S. technology company through mergers and acquisitions and research and development, will not be replaced, HP said in a statement.

“Shane has been a powerful innovator for our business groups and other corporate divisions,” Whitman said in the statement.

But “in an effort to drive strategy, research and development closer to the company’s businesses, it will not be replacing the role of chief strategy and technology officer,” HP’s statement read.

Shares in the company have plunged 17 percent since August 18, when it announced the $12 billion acquisition of Autonomy and its decision to consider a spinoff of its PC business, the world’s largest. HP later acknowledged that the decision to announce may have been premature, and may have alienated some partners.

(Editing by Bob Burgdorfer)

Sales of Windows, which still runs more than 90 percent of the world’s personal computers, edged up only 2 percent from the year-ago quarter, in line with limp PC sales across the board.

That broke the streak of three straight quarters of declines, but it fell short of some analysts’ hopes.

“We still had Windows miss again, although not by nearly as much as it has the last couple quarters,” said Brendan Barnicle, an analyst at Pacific Crest Securities.

Sales of Windows 7, Microsoft’s latest system, have leveled off after a big launch in 2009. Growth is now dependent on Microsoft’s core business customers, which are still spending on technology despite the slow economy.

In contrast, hard-up consumers are waiting for next year’s Windows 8, putting off purchases indefinitely, or opting to buy Apple Inc iPads instead.

Microsoft Chief Financial Officer Peter Klein said the cycle of businesses buying new PCs to replace aging machines was still in the “middle innings,” offering hope of continuing modest growth.

“We expect that dynamic of business PCs growing faster (than consumer) to last throughout this fiscal year at least,” Klein said on a conference call with analysts.

Microsoft’s shares, which have traded in the $20-$30 range for the last decade, fell 0.7 percent in after-hours trading, to $26.85. They closed at $27.04 on Nasdaq.

BING LOSS NARROWS

The brightest spot for the world’s largest software company was an indication that its perennially money-losing online services unit — including the MSN Internet portal and Bing search engine — may have turned a corner.

The unit lost $494 million in the quarter, the lowest loss in the last seven quarters, slowing the flood of red ink that has cost Microsoft more than $5 billion since it launched Bing in mid-2009, as it invests heavily to catch up with Google Inc.

Microsoft made no new statements about Yahoo, which is up for sale. Reuters and the Wall Street Journal have reported that Microsoft may work with private equity firms in putting together a bid for the ailing Internet giant, which it tried and failed to buy outright in 2008.

CFO Klein sidestepped an analyst’s question on whether a sale of Yahoo might interfere with Microsoft’s search engine cooperation with the company, which has yet to yield the expected profits.

“This is a long-term alliance,” said Klein. “They’re super-focused on what we need to do. And no matter what, that’s the goal at hand.”

NO BEAT

The Redmond, Washington company reported fiscal first-quarter net profit up 6 percent to $5.74 billion, or 68 cents per share, compared with $5.41 billion, or 62 cents per share, a year ago.

That met Wall Street’s average estimate, according to Thomson Reuters I/B/E/S. It is the first time in 10 quarters that Microsoft has not exceeded the average estimate.

“They were just in line on EPS, which typically Microsoft beats,” said Barnicle. “Q1 is seasonally not a big quarter for Microsoft, and this was no exception.”

Overall sales rose 7 percent to $17.37 billion, helped by Office, which remains popular with businesses even in the difficult global economy.

The Office unit posted an 8 percent gain in sales to $5.6 billion, making it Microsoft’s biggest-selling and most profitable unit.

The server and tools unit, which sells the server software behind the datacenters enabling “cloud” or Internet-based computing, rose 10 percent to $4.2 billion, but even that fell short of some analysts’ expectations for the fast-growing area of the technology market.

The entertainment and devices unit posted a 9 percent gain in sales, helped by the Xbox, which remains the most popular game console in the United States.

MORE CASH OFFSHORE

Microsoft said its $8.5 billion deal to buy online chat service Skype, which closed last week, would add about $600 million to expenses this fiscal year. The company now estimates costs of $28.6 billion to $29.2 billion for fiscal 2012, which started July 1.

Microsoft has a cash hoard of $57.4 billion, with $51 billion of that — or 89 percent — parked overseas. The company is increasing its overseas cash aggressively. Three months ago, Microsoft said it had $52.8 billion in total cash, with only $45 billion — or 85 percent — overseas.

Faster-growing rival Apple on Tuesday reported it has $81 billion in cash.

(Additional reporting by Lisa Richwine in Los Angeles; Editing by Richard Chang and Matthew Lewis)

The aide commented on the plan after Democratic Senator Dianne Feinstein said the Federal Reserve planned to send Congress “legislative recommendations” on housing.

The aide said Feinstein “misspoke for a second” and meant the administration and the Federal Housing Finance Agency.

After Senate Democrats met with Fed Chairman Ben Bernanke, Feinstein told reporters the central bank chief had stressed that more needed to be done to help the housing sector.

“They are going to submit a list of recommendations next week,” Feinstein told reporters. She said the pending proposals are “legislative recommendations we can look at.”

Senator Mark Warner, who also attended the meeting, said Bernanke spoke about what can be done to get mortgage refinance moved “down the field.”

“There might be some ideas we are going to have shortly on that,” he told reporters after the meeting.

It is unclear what Congress might do given deep political divisions in the House of Representatives and the Senate.

A handful of Senators are trying to advance a proposal that would make it easier for middle-class Americans to buy homes in expensive real estate markets.

Separately, the administration is pushing the regulator for Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB), the two biggest U.S. housing finance providers, to allow more homeowners who owe more than their homes are worth to refinance their loans at lower rates.

Treasury Secretary Timothy Geithner said on Tuesday he hoped a proposal could be laid out “in the coming days.” A source familiar with the plans told Reuters they could be unveiled as early as Monday.

The Fed has been exploring what steps it might be able to take to spur a more vigorous economic recovery and pull down an unemployment rate that has been stuck above 9 percent for five straight months.

On Thursday, Fed Governor Daniel Tarullo said the central bank should consider purchasing more mortgage-backed securities.

He said an MBS purchase program could be made more effective if further steps were taken to help so-called underwater borrowers refinance. He said such an effort need not focus only on loans backed by Fannie Mae and Freddie Mac, but that legislation might be needed if policymakers wanted to reach other homeowners.

The U.S. central bank has kept overnight interest rates near zero since December 2009 and has already bought $2.3 trillion in government and mortgage-related bonds.

In September, it decided to shift its holding of bonds to try to put more downward pressure on longer-term rates. It also said it would begin reinvesting principal payments from its holdings of mortgage-related debt to help housing.

(Additional reporting by Pedro Nicolaci da Costa and Tim Ahmann; Editing by Sandra Maler, Vicki Allen, Leslie Adler and Andrew Hay)

The newspaper said that Dexia Bank Belgium, a wholly owned subsidiary of the listed Dexia entity that was seeking funds, loaned Holding Communal, an arm of Belgium’s powerful municipalities, 1.2 billion euros which was largely used to participate in two Dexia capital increases in 2006 and 2008.

While, Arco, which invests on behalf of a Belgian trade union, borrowed 275 million purely for the cash calls, according to the FT.

The two parties jointly owned 35 percent of Dexia shares, and continue to be represented on its board, the FT said.

The funding move by the stricken Franco-Belgian lender, that has been at the center of recent market turmoil, amounted to it effectively borrowing money from itself to finance a capital increase.

In a further twist, the FT reported that Dexia accepted its own shares as collateral for the loans. The arrangement meant that any falls in the bank’s share price left it potentially nursing large losses.

Dexia’s market capitalization has fallen from 21 billion euros in 2006 to about 1 billion euros today.

The FT said the funding move raised the Belgian regulators’ concerns at the time, but although it is illegal in most jurisdictions and is now banned in the EU, Dexia did not break Belgium’s existing laws.

(Reporting by Stephen Mangan; Editing by Richard Chang)

France and Germany said in a joint statement on Thursday that European leaders would discuss a global solution to the crisis on Sunday but no decisions would be adopted before a second meeting to be held by Wednesday at the latest.

The major sticking point is over how to scale up the European Financial Stability Facility (EFSF), a 440 billion euro ($600 billion) fund so far used to bail out Portugal and Ireland.

France and Germany disagree over the best way to bolster the facility, with Paris fearing its triple-A credit rating could come under threat if the wrong method is chosen.

Failure to agree on leveraging the EFSF will further damage confidence in the euro zone’s ability to tackle its debt crisis after nearly two years of trying to get on top of a problem that started in Greece and now threatens Italy, Spain and even France.

Underlining the threat the euro zone crisis poses to the broader global economy, U.S. President Barack Obama held a video conference with German Chancellor Angela Merkel and French President Nicolas Sarkozy, reiterating that he hopes a solution will be in place in time for a summit of G20 leaders in France on November3-4.

Merkel and Sarkozy “fully understand the urgency of the issues in the euro zone and are working diligently to develop a comprehensive solution that addresses the challenge and which will be politically sustainable,” the White House said.

In their effort to agree a comprehensive resolution plan, euro zone leaders are striving to agree new steps to reduce Greece’s debt, strengthen the capital of banks exposed to weak sovereign debt and leverage the EFSF to stem contagion to bigger economies.

The communique, issued after Sarkozy and Merkel spoke by telephone, said Paris and Berlin wanted negotiations to start immediately with the private sector over its contribution to a sustainable plan for Greece’s mountainous debt.

The statement from the euro zone’s dominant two leaders, who will meet in Brussels for talks on Saturday, suggested little progress had been made in that area either.

Despite the divisions on the EFSF, EU leaders have made headway on another critical element in tackling the crisis — the recapitalization of European banks — while a draft statement for Sunday’s summit showed euro zone countries will make rules to limit budget deficits and public debt part of national legislation by the end of next year.

EU officials said all 27 member states had agreed that just short of 100 billion euros was required to bolster bank balance sheets, a substantial step forward in attempts to protect the system against the threat of a default in Greece or elsewhere.

“The figure has been discussed with member states. It is now acceptable for everybody,” an EU source involved in the discussions said.

Banks will be required to come up with the capital from shareholders first, and if that fails then national governments will provide the support. Only as a last resort will the EFSF be used to recapitalize institutions.

A deal on bank capital clears one hurdle ahead of Sunday, but at least three others remain — a deal on a revised second bailout package for Greece, the extent of the private sector’s involvement in that, and the EFSF’s structure.

The International Monetary Fund and the EU also do not see eye-to-eye over the sustainability of Greek debts, with the IMF concerned that EU projections may be too optimistic and that deeper debt reduction is needed, EU sources told Reuters.

Despite the differences of opinion, EU and IMF inspectors are expected to go ahead and approve an 8 billion euro aid payment to Greece next month, the sixth tranche from a 110 billion euro package of EU/IMF loans agreed last May.

Without that payment Greece faces default, possibly dragging the larger economies of Spain and Italy into the mire and sending shockwaves through the European banking system.

A German government spokesman said the second meeting would allow the budgetary committee of the German parliament to consider plans for the euro zone rescue fund. The committee has to consider such plans, according to German regulations.

“The president and the chancellor affirmed their complete agreement to provide a global, ambitious response to the crisis currently facing the euro zone,” the Franco-German statement said.

HOW TO SCALE UP

The biggest challenge is agreeing on the method of scaling up the EFSF. France has argued the most effective way of leveraging it is to turn it into a bank which could use funding from the European Central Bank, but both the ECB and Berlin oppose this and the proposal appears to be dead.

Instead, there is an initiative to use the EFSF to guarantee a portion of potential losses on new euro zone debt, a way of trying to restore market confidence and convince investors that Italian and Spanish bonds are safe to buy.

By guaranteeing only a portion, perhaps a third or a fifth, of each debt issue, the EFSF’s funds would stretch 3-5 times further, increasing it to around 1-1.5 trillion euros.

But analysts are concerned that such a plan could create a two-tier bond market, with bonds that have guarantees trading at a premium to the secondary market — an outcome that would likely fuel the turmoil markets are already in.

Markets caught up with the downbeat tone. European shares fell and the euro weakened.

“I don’t think they can meet expectations. The summit will fall well, well short of the kind of big bang needed to reassure the markets,” said Simon Tilford, chief economist at the Center for European Reform in London.

Guidelines for changes to the bailout fund obtained by Reuters confirmed it will be able to buy bonds on the secondary market once a request from a country is approved by ECB and euro zone finance officials.

FORCED BANK LOSSES?

Adding to uncertainty, EU officials said there was growing acceptance among key euro zone member states that further private sector involvement in Greek debt reduction may have to be forced, not voluntary — an outcome ruled out up to now.

“Let’s be serious, everybody knows that a 50 percent haircut, as Germany is asking for, is not a voluntary move,” one EU official said. Leaders will also have to agree on a new bailout package for Greece, one that is expected to be at least 110 billion euros, not including the private sector’s role.

In July, banks and insurers agreed to contribute 50 billion euros to reducing Greece’s debt via a debt buyback and swap agreement, which equated to a 21 percent writedown. That is now seen as insufficient to make Athens’ debts sustainable.

Greece remains mired in recession and its overall debt is forecast to climb to 357 billion euros this year, or 162 percent of annual economic output — a debt pile few economists believe can be paid back.

While Europe’s leaders rush to stop a larger writedown of Greek debt infecting others in the euro zone, ordinary Greeks are raging at the prospect of years more pain as the price of help from international lenders.

Clashes between rival groups of protesters broke out in front of the Greek parliament, interrupting a rally by tens of thousands against a tough new package of austerity measures.

Nonetheless, Greek lawmakers gave final approval for the law cutting wages and hiking taxes, crucial for the country to receive a next batch of bailout funds and avoid bankruptcy.

($1 = 0.730 Euros)

(Additional reporting by Andreas Rinke and Madeline Chambers in Berlin, John O’Donnell, Julien Toyer, Jan Strupczewski and Luke Baker in Brussels and Michael Shields in Vienna; Writing by Mike Peacock and Luke Baker; Editing by Jon Boyle)

An online coupon sent via email from Groupon is pictured on a laptop screen November 29, 2010 in Los Angeles.,

(Muchfinance) – Daily deals website Groupon Inc will list its shares on the Nasdaq, two sources familiar with the situation said.

The information is not public and the sources declined to be named. The Nasdaq and the New York Stock Exchange declined comment.

Groupon has filed to list its shares under the ticker symbol “GRPN” but has not yet disclosed which exchange it has selected.

(Reporting by Clare Baldwin; Editing by Steve Orlofsky)

Hedge fund director John Alfred Paulson, president of Paulson & Co Inc, testifies before a US House Oversight and Government Reform Committee hearing on the regulation of hedge funds, on Capitol Hill in Washington,

(Muchfinance) – Hedge fund heavyweight John Paulson said poor performance by his funds keeps him up at night, so the billionaire stock picker must be going sleepless a lot these days.

This year is quickly shaping up to be the worst of Paulson’s decades-long career, with most of his portfolios in the red and the Advantage Plus fund off 47 percent through September.

Paulson, who shot to fame and fortune with a bet in 2007 that the housing market would crash, has been engaging in as much damage control as possible before a critical October 31 redemption deadline. Last week he held a call with investors, and on Thursday he spoke at a conference sponsored by the industry trade group Managed Funds Association.

As Paulson and two other prominent fund managers, Eric Mindich and Paul Singer, addressed an audience at the Pierre Hotel in midtown Manhattan, a handful of anti-Wall Street protesters gathered outside on Fifth Avenue chanting slogans aimed at the executives.

The panel discussion — titled Challenges, Opportunities and What Keeps You Up at Night — was off limits to the media and attendees were asked not to speak to reporters. But several chatted all the same, saying that when Paulson was asked the critical question, he replied that losing money and poor performance robs him of sleep.

“He was being very honest and earnest, not at all flip about this matter,” said one attendee, who did not want to be identified.

Many of Paulson’s funds have lost big this year as the money manager bet that the U.S. economy would revive sooner rather than later.

Outside the hotel, the protesters handed out fliers with Paulson’s and Singer’s pictures and chanted “Hey, Paulson, you can’t hide, we can see your greedy side. Paul Singer, you can’t hide, we can see your greedy side.”

Paulson earned $5 billion last year, an industry record, on a successful bet on gold. He earned about $3 billion in 2007.

Since the protests against Wall Street started, Paulson’s eye-popping paydays have made him a target.

But on Thursday, he slipped out of the Pierre Hotel nearly unnoticed, dashing out a side door into a waiting black vehicle that whisked him away.

(Editing by John Wallace)