Exit uncertainty ends stocks' gaining streak

08:09, February 23, 2010      

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Uncertainties about how governments and central banks will draw back from stimulus measures sent Wall Street lower on Monday after stocks had gained in all sessions last week.

As of market closing, the Dow Jones dipped 18.97, or 0.18 percent, to 10,383.38. The Standard & Poor's 500 index slipped 1. 16, or 0.10 percent, to 1,108.01 and the Nasdaq was down 1.84, or 0.08 percent, to 2,242.03.

Among the 30 companies that consist the Dow Jones average, 11 rose while 19 fell on Monday. Financial shares gained ground, with JPMorgan as the top contributor to Dow's movement.

U.S. stocks gained in all trading sessions last week, with both the Dow Jones and S&P scored a weekly gain of over 3 percent, as investors turned their attention to the signs of a strengthening U. S. economy.

But the optimism somehow faded on Monday as worries about the sustainability of the recovery and how and when the Federal Reserve will start to withdraw excessive liquidity resurfaced.

Focus is now concentrated on Fed Chairman Ben Bernanke, who will give his semiannual assessment of economic conditions later this week. The market is concerned about the central bank's plan to quit its monetary stimulus policies.

Fed's move last week to increase emergency overnight loan rates prompted speculation that it may start earlier to tighten credit. Increase of key interest rates isn't expected to come until second half of this year or next, many analysts believed. But the central bank may begin selling assets on its books earlier than thought.

The dollar strengthened against the euro on Monday, pressuring on commodities prices. Oil prices hovers near 80 dollars a barrel and gold future fell. Energy and commodity related stocks fell.

Shares rose in early afternoon trading as a rally in financial shares and takeover news boosted market sentiment.

Banking shares were among the best performers on Monday as investors await the new financial regulatory reform which will be discussed in Senate this week. JPMorgan gained 82 cents, or 2.05 percent, to 40.85 dollars a share.

Schlumberger Limited, the world's largest oilfield services company, agreed on Sunday to buy rival Smith International for about 11 billion dollars in stock, representing the biggest transaction of the year.

There is no economic data scheduled to release on Monday. Closely watched figures on Tuesday include home prices and consumer confidence, followed later in the week by durable goods orders and a revised look Friday at fourth-quarter GDP growth.

Source: Xinhua
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