Stocks Surrender Gains, Lose Ground

As financial firms continued to weave their way through the credit crisis, the Federal Deposit Insurance Corp. announced that its count of troubled banks climbed from 117 in the second quarter to 171 in the third quarter. The agency also said that the total assets controlled by problem banks increased from $78.3 billion to $115.6 billion in the same period.

FDIC head Sheila Bair said in a press conference that the increase in the number of problem banks reflects ongoing troubles in the U.S. economy and the seizure in the credit markets.

"I don't think there's any great surprises," said Hogan of Jefferies. "Unfortunately we know that there are a lot of banks that have issues, and a lot of them will be folded into other banks by the end of the year."

In Chicago, President-elect Barack Obama announced his selection of Peter Orszag to direct the Office of Management and Budget. Orszag is currently the director of the Congressional Budget Office. Obama also named majority staff director of the House Appropriations Committee Robert Nabors as deputy director of the OBM.

Obama also said that the current financial crisis will warrant careful watchfulness of government spending and targeted initiatives to help stimulate growth.

The day's economic data were less than rosy. The Bureau of Economic Analysis revised its read of the third-quarter decline in GDP to 0.5% from 0.3%.

Separately, the Conference Board's November consumer confidence index gave a reading of 44.9, up from 38 in October and ahead of economists' forecasts.