Stocks, Oil Fall as Dollar Recovers
(Updated with commentary, stock prices.)
NEW YORK (TheStreet) -- Stocks were unable to recover Monday afternoon as Wall Street reacted to a round of bank downgrades and a strengthening dollar.
The Dow Jones Industrial Average lost 104.22 points, or 1.1%, to 9,867.96, while the S&P 500 edged down 12.66 points, or 1.2%, to 1066.94. The Nasdaq gave up 12.62 points, or 0.6%, to 2141.85.
Financials were at the forefront of declines, with the KBW Bank Index losing 4.1% after Rochedale Securities analyst Dick Bove downgraded Fifth Third (FITB), US Bancorp (USB) and SunTrust (STI). Shares of those banks fell 7.9%, 3.2% and 5.4%, respectively.Homebuilder stocks were also lower, despite reports that Senate leaders are negotiating to extend an $8,000 tax credit for first-time homebuyers through 2010. Toll Brothers (TOL), Lennar (LEN) and D R Horton (DHI) lost more than 4% each. The turn in the broader markets came as the dollar rebounded after making a new 14-month low early Monday. At the same time, gold gave up $13.60, to $1,042.80 an ounce, while crude oil futures dropped $1.82, to $78.68 a barrel. "The dollar is having a bit of a balance, and it's just really a continuation of weakness last week," says Ryan Detrick, senior technical strategist at Schaeffer's Investment Research. "While the move has garnered the market's attention and stands out on a short-term basis, there does not appear to be any practical reasoning behind today's move other than what started as a short-term correction that gained momentum as dollar shorts started to cover their positions resulting in a short squeeze," wrote Robert Pavlik, chief market strategist banyan partners.
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