Spending Fears Spank Stocks

Financial subsector indices were mixed. The KBW Bank Index and the Amex Securities Broker/Dealer Index both advanced 0.3%. The NYSE Financial Sector Index was off 0.9%.

As for Countrywide, which surged 51% in the last session on a report it was about to be bought, it was down 18.3% to finish at $6.33 this time. Bank of America agreed to buy the lender for $4 billion, or $7.16 a share. That's more than 7.5% below its closing price but 40% above where the stock was before the prospect of a takeover was reported. BofA was fractionally weaker.

Elsewhere, Citigroup (C Quote - Cramer on C - Stock Picks) was on the winning side, rising 1.6% to $28.56 amid speculation it might be close to getting a multibillion cash infusion from an investor or investment group, possibly Saudi billionaire Prince Alwaleed.

Among analyst ratings changes, JPMorgan Chase upped Dow member Honeywell (HON Quote - Cramer on HON - Stock Picks) to neutral from underweight and Dell (DELL Quote - Cramer on DELL - Stock Picks) to overweight from neutral. Also on the positive side, Stifel Nicolaus raised its rating for Caterpillar (CAT Quote - Cramer on CAT - Stock Picks) to buy from hold.

On the downside, Deutsche Securities cut several stocks to sell, including Gold Fields (GFI Quote - Cramer on GFI - Stock Picks), Harmony Gold (HMY Quote - Cramer on HMY - Stock Picks) and Anglogold (AU Quote - Cramer on AU - Stock Picks).

Traders were also digesting a spate of economic data. Before the open, the Labor Department said its import price index was unchanged in December, compared with a revised 3.3% rise in November. The data matched economists' expectations.

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