* FedEx drops after lower profit forecast
* Dollar jumps 0.9 percent
* Whitney cuts Goldman, Morgan Stanley estimates
* Dow down 1.3 pct; S&P off 1.2 pct; Nasdaq down 1.2 pct
* For up-to-the-minute market news, click STXNEWS/US
(Updates to close)
By Chuck Mikolajczak
NEW YORK, Dec 17 (Reuters) - U.S. stocks fell on Thursday
as the dollar's rebound spurred a safe-haven trade, cutting
demand for riskier assets, while a soft profit outlook from
economic bellwether FedEx sank transportation shares.
Financial services stocks took a beating after influential
banking analyst Meredith Whitney cut her earnings estimates on
Goldman Sachs Group Inc <GS.N> and Morgan Stanley <MS.N>.
The U.S. dollar index <.DXY>, which measures the
greenback's performance against a basket of major currencies,
rose nearly 1 percent -- hitting its highest level in more than
three months.
In recent months, stocks have risen sharply while the
greenback dropped, as investors took advantage of the
inexpensive currency to buy higher-yielding assets.
"The dollar is starting to spook the market here a little
bit," said Terry Morris, senior vice president and senior
equity manager for National Penn Investors Trust Company in
Reading, Pennsylvania.
An unexpected increase in new claims for jobless benefits
in the latest week illustrated the bumpy road for the U.S.
economic recovery. The jobless claims offered a sharp contrast
to a report from the Federal Reserve Bank of Philadelphia,
whose index showed factory activity accelerated rapidly in the
U.S. Mid-Atlantic region in December. For details, see
[]
The Dow Jones industrial average <> dropped 132.86
points, or 1.27 percent, to end at 10,308.26. The Standard &
Poor's 500 Index <.SPX> fell 13.10 points, or 1.18 percent, to
1,096.08. The Nasdaq Composite Index <> lost 26.86 points,
or 1.22 percent, to close at 2,180.05.
The market shuddered after FedEx Corp <FDX.N> forecast
third-quarter profit below analysts' expectations, pushing its
stock down 6.1 percent to $84.47. The Dow Jones Transportation
Average <.DJT> lost 1.2 percent. []
Whitney trimmed earnings estimates for Goldman and Morgan
for 2010 and 2011. Goldman Sachs shares dropped 2.5 percent to
$160.93, while Morgan Stanley shed 4 percent to $29.12.
[]
The S&P Financial Index <.GSPF> slid 1.8 percent, while the
NYSE Arca Broker/Dealer Index <.XBD> fell 2 percent.
Citigroup Inc <C.N> tumbled 7.3 percent to $3.20 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 Citigroup stake, sometime within the next 12
months. []
RIM FLIES AFTER THE BELL
Research In Motion's <RIM.TO><RIMM.O> stock jumped 10.8
percent to $70.40 in extended trade on Nasdaq after the
BlackBerry maker reported better-than-expected quarterly
results. []
Software maker Oracle Corp <ORCL.O> gained 4.2 percent to
$23.84 in after-hours trade after posting adjusted earnings
that topped Wall Street's estimates. []
During the regular session, the dollar's spike coincided
with a slide of nearly 3 percent in the price of gold. The
sell-off in gold futures hurt the shares of U.S.-listed gold
miners. The Arca Gold Bugs index <.HUI>, which measures the
performance of 15 gold miners with U.S-traded shares, tumbled
5.9 percent.
The U.S. Senate Banking Committee approved the nomination
of Federal Reserve Chairman Ben Bernanke for a second term,
sending it to the full Senate for a confirmation vote. Stocks
were relatively unaffected after the vote. []
Among other factors influencing the market's mood, analysts
pointed to the impact of Friday's quarterly expiration and
settlement of December options and futures, also known as
quadruple witching. This often adds high levels of volatility
as players adjust and/or exercise their derivatives positions.
(Editing by Jan Paschal)
