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.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV