Two-dimensional hybrid (particle ions and fluid electrons) simulations of a finite plasma beam moving through a collisionless plasma parallel to an ambient magnetic field are considered. When the relative drift speed exceeds twice the local Alfven velocity, an electromagnetic ion beam instability is excited which produces an energetic plasma in the interaction region with &bgr; larger than unity. This energetic plasma pushes out the magnetic field, creating a diamagnetic cavity and launching outgoing Alfven waves. Application of the results to recent observations of hot diamagnetic cavities in the solar wind is discussed. ¿ American Geophysical Union 1988