Financial sector stocks also slumped after the most influential banking analyst, Meredith Whitney cut earnings projections for Goldman Sachs Group Inc. and Morgan Stanley.
U.S. dollar index is an indicator of performance over a set dollar currency rose nearly 1%, or nearly the highest in the last 3 months.
The strengthening U.S. dollar and stock indexes lately highly correlated. In recent months, the shares rose sharply enough at the time the U.S. dollar slumped. Investors took advantage of the currency is not expensive to buy assets with higher yields.
"The dollar began to haunt the market a bit here," said Terry Morris, Senior Vice President National Penn Investors Trust Company, as quoted by Reuters on Friday (18/12/2009).
In trading Thursday (17/12/2009), the Dow Jones industrial average (DJIA) closed lower to 132.86 points (1.27%) to as low as 10,308.26. Index Standard & Poor's 500 also down 13.10 points (1.18%) to the level of 1096.08 and the Nasdaq slumped 26.86 points (1.22%) to the level of 2180.05.
Market sentiment also got negative after FedEx Corp. issued financial statements below analyst expectations, causing its shares slumped 6.1%.
Financials Index S & P noted weakened 1.8%. Citigroup shares fell 7.3% after the offering of shares and bonds did not attract many investors and the price is lower than expectations. It also sparked the U.S. Ministry of Finance to postpone plans to sell shares of Citigroup until 12 months into the future.
Substantial trade volume to 1.72 billion, above average last year of 1.49 billion. On the Nasdaq, transactions reached 1.94 billion, below average last year of 2.28 billion.
Gold and Oil Prices Corrected
As the strengthening U.S. dollar, oil and gold prices have corrected. Both commodities are slowly falling from its highest point.
In London trading, light sweet crude January delivery fell 1.19 dollars to U.S. $ 71.48 per barrel. While Brent oil February delivery fell 1.62 dollars to U.S. $ 72.67 per barrel.
Meanwhile, gold prices in the spot market is stable at the level recorded U.S. $ 1100 per ounce after earlier tumbling as much as 2%.
