US STOCKS-Wall St drops on strong USD, FedEx weighs

                                
   * FedEx drops after lower profit forecast
                                
 * Citi shares slide after stock offering
                                
 * Indexes down: Dow 0.8 pct; S&P 0.6 pct; Nasdaq 0.7 pct
                                
 * For up-to-the-minute market news, click STXNEWS/US
 (Updates with data, changes quote, adds byline)
                                
 By Rodrigo Campos
                                
 NEW YORK, Dec 17 (Reuters) - U.S. stocks fell on Thursday
as the dollar rebounded, diminishing the appetite for risky
assets, while FedEx forecast profits below estimates and
Citigroup got a cool reception for its stock offering.
                                
 An unexpected increase in applications for jobless benefits
highlighted the spotty nature of the U.S. economic rebound and
contrasted against an index that showed factory activity
accelerated rapidly in the U.S. Mid-Atlantic region. For
details, see [ID:nN17380585]
                                
 Among the top decliners were financial shares, hurt by
prospects of less liquidity, as the Fed plans to terminate most
of its emergency lending facilities on Feb. 1.
                                
 "The dollar isn't helping the market. The cyclical trade
has been one of the leaders in terms of influencing the market,
and it is continuing to exert pressure on equities," said Steve
Goldman, market strategist at Weeden & Co in Greenwich,
Connecticut.
                                
 "The markets have had a big recovery from their lows, and
right now traders are looking to more or less nail down some
profits."
                                
 The Dow Jones industrial average <.DJI> dropped 83.66
points, or 0.80 percent, to 10,357.46. The Standard & Poor's
500 Index <.SPX> fell 7.06 points, or 0.64 percent, to
1,102.12. The Nasdaq Composite Index <.IXIC> lost 15.54 points,
or 0.70 percent, to 2,191.37.
                                
 Citigroup Inc <C.N> slid 7.5 percent to $3.19 after the
bank's stock and bond offering attracted weak demand and priced
much lower than expected, prompting the U.S. Treasury to delay
a plan to sell its stock in the bank. [ID:nN17163115]
                                
 A government official said the Treasury plans to sell its
Citi stake within 12 months.
                                
 Package delivery giant FedEx Corp, <FDX.N> a bellwether for
the economy, forecast third-quarter profit below expectations,
sending shares down 4.8 percent to $85.65. [ID:n16107973]
                                
 Shares of FedEx rival United Parcel Service Inc <UPS.N>
dropped 1.3 percent to $58.25, and the Dow Jones Transportation
average <.DJT> fell 1 percent.
                                
 The Fed voted Wednesday to keep interest rates at historic
lows, but the U.S. dollar strengthened as the Fed said
"economic activity has continued to pick up." [ID:nN16119711]
                                
 Growing concerns about Greece's fiscal health weighed on
the euro and further lifted the greenback. The dollar index
<.DXY> jumped 1 percent.
 (Additional reporting by Ryan Vlastelica; editing by Jeffrey
Benkoe)