Stock Market News for December 16, 2009

U.S. stocks fell for the first time in five days, led by financial shares, as concerns grew the Fed would hike interest rates sooner than expected.  General Electric’s forecast that revenue and earnings would be flat next year also weighed on sentiments.

Yesterday, shaky nerves on the Street sent major stock indexes off their 14-month peaks.  The DJIA retreated 49 points, or 0.5%, to close at 10,452, the tech-heavy NASDAQ gave up 0.5% to finish at 2,201, and the broader S&P500 index closed off 0.6%, at 1,108.  On the NYSE, declining issues were ahead of those that advanced three-to-two on volume of 1.18 billion shares.  Treasury yields advanced for the fifth straight day, as the price of the 10-year fell 11/32 and its yield rose to 3.594%.  The greenback advanced against a basket of currencies as the ghost of inflation came to haunt investors.  

Moody's (NYSE:MCO - Analyst Report) issued a report on sovereign risk subtitled, "Fasten Your Seat Belts: Tumultuous Times Ahead," as governments stretch to pay for bulging budget deficits, making the US currency a relative, safe haven investment.

Gold prices eased 0.2% on Tuesday to $1,123.  Crude prices registered a 1.7% advance, ending their worst losing streak in eight years.  Meanwhile, OPEC lifted its forecast for 2010 global oil demand by 70,000 bpd to an average of 85.1 million bpd.  However, contrary to expectations of a drop of 2 million barrels, an industry inventory survey reported a surprise gain in crude stockpiles last week of 920,000 barrels. 

Nine of the ten S&P 500 industry sectors ended lower yesterday, led by a 1.5% fall in financials on worries of credit card delinquencies as well as the likelihood of higher interest rates coming sooner than later.  On the DJIA, Bank of America (NYSE:BAC - Analyst Report) led the decliners with a 2.8% decline, followed by a 2.2% fall in JP Morgan (NYSE:JPM - Analyst Report) shares.  Bank of America reported 13% write offs of November credit card debt, the largest percentage of the major issuers, although at a reduced rate from the prior month.  JP Morgan wrote off 8.8% in November, versus the prior month’s 8.02%.

Today's session may see lackluster trading as traders await the roll-out of Fed policy at 2:15 PM.  Premarket futures point to a higher open.

Read the full analyst report on MCO

Read the full analyst report on JPM

Read the full analyst report on BAC