Update For Stock Market In Decline

Dec. 15, 2009 - PRLog -- NEW YORK (MarketWatch - by Geoffrey Rogow)

Financial stocks led the market lower Tuesday as rising credit-card delinquency rates weighed on Capital One, J.P. Morgan and others, and as concerns percolated over those regional banks, including PNC Financial and SunTrust, that are yet to repay government loans.

After marking a new closing high for 2009 on Monday, the Dow Jones Industrial Average closed Tuesday's session down 49.05 points, or 0.47%, at 10452.00. The index's leading decliners were Bank of America, off 44 cents, or 2.8%, at 15.19, and J.P. Morgan, down 91 cents, or 2.2%, at 40.86.

The Standard & Poor's 500 index dipped 6.18, or 0.55%, to 1107.93, snapping a four-session winning streak. The index's drop Tuesday included a 1.7% decline for its financial components.

Weighing on financials, the latest numbers from credit-card issuers including Capital One Financial, J.P. Morgan and Bank of America indicated that consumers remain stressed by high rates of joblessness. Delinquency rates, a key gauge of future losses, continued to rise for most card issuers, and losses stemming from souring credit-card loans remain elevated. Capital One, a component of the S&P 500, closed down 96 cents, or 2.3%, at 40.09.

Bucking the trend of a declining sector, Wells Fargo gained 17 cents, or 0.7%, to 25.66, after a $10.65 billion share issuance on Tuesday will be used to repay government bailout money.

Still, the move for Wells Fargo wasn't good for others as shares of some of the largest banks that haven't yet repaid TARP funds moved lower on concerns about when and how they would repay their government funding. Notably, PNC Financial Services lost 1.54, or 2.9%, to 51.82; SunTrust Banks dipped 1.28, or 5.8%, to 21; and KeyCorp declined 28 cents, or 4.6%, to 5.82.

"There has been this move lately back from risk assets to more prudent risk assets," said Rick Lake, portfolio manager of the Aston/Lake Partners Lasso Alternatives Fund. "At this point, investors want the comfort of knowing the asset they hold can withstand a downturn."

Aside from the move for banks, the market was also damped by Best Buy, which lost 3.84, or 8.5%, at 41.53. Sales of laptop computers, televisions and other electronics products helped Best Buy post better-than-expected fiscal third-quarter earnings, though the largest U.S. consumer-electronics retailer said revenue gains are being driven by items with lower profitability.

Helping to keep the market's decline somewhat in check was a rebound in crude-oil prices, which snapped a nine-session losing streak. The move for oil helped energy stocks end slightly in the green, including National Oilwell Varco, which gained 43 cents, or 1%, to 44.73.

Among other indexes, the Nasdaq Composite closed down 11.05, or 0.50%, at 2201.05.

Moody's Investors Service said it remains concerned over Ireland's banking problems, including those at Allied Irish Banks and Bank of Ireland. Moody's kept its credit-rating view at negative, with shares of Allied Irish Banks closing down 29 cents, or 7.3%, at 3.68, and Bank of Ireland losing 77 cents, or 8.8%, to 8.

Wisconsin-based regional bank Marshall & Ilsley lost 41 cents, or 6.8%, to 5.58, after saying demand for its tender offer outstripped the $400 million of principal it offered to repurchase.

On the deals front, Hospira agreed to a $400 million takeover of Orchid Chemicals & Pharmaceuticals' operations that will expand Hospira's generic injectable antibiotics operations. Hospira closed up 50 cents, or 1%, at 49.47.

Drug wholesaler AmerisourceBergen gained 78 cents, or 3.1%, to 25.78, after saying it expects fiscal first-quarter earnings to exceed Wall Street's views by several cents a share and forecast a profit for the year at the top end of its prior guidance.

FactSet Research Systems' fiscal first-quarter earnings rose 1.6% as margins climbed, though the financial-information provider gave a second-quarter view narrowly below Wall Street estimates. FactSet closed down 9.22, or 12%, to 66.84.

Gilead Sciences (Nasdaq), off 1.65, or 3.5%, to 45.31, ended development of its hypertension treatment darusentan after the drug missed the primary goal of a Phase III trial. The biopharmaceutical company said that, instead of another study, it would rather allocate its resources to other products in its pipeline.

Qwest Communications increased 18 cents, or 4.4%, to 4.26. UBS raised its rating on Qwest to buy from neutral due to attractive valuation, belief in the stability of its cash flow and expectations for improving revenue trends.  www.marketwatch.com

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