US STOCKS-Wall St retreats, led lower by financials

* Financial shares weigh following a stellar week

* Dollar strengthens on euro debt worries, G20 meeting

* Indexes: S&P off 0.3 pct, Dow down 0.4 pct, Nasdaq flat

* For up-to-the-minute market news see [STXNEWS/US]
(Updates to late afternoon, changes byline)

By Angela Moon

NEW YORK, Nov 8 (BestGrowthStock) – Wall Street retreated from a
two-year high on Monday, weighed down by financial stocks and a
stronger dollar.

The broad S&P 500 has risen five straight weeks and nine of
the past 10, supported by the Federal Reserve’s plan to buy
$600 billion of Treasuries to lower interest rates and
reinvigorate a sluggish economy.

With those gains, traders said most S&P sectors are
susceptible to a decline.

Financial stocks, which were top gainers in the past few
sessions, fell, with the S&P financial index (.GSPF: ) off 0.8
percent following a 6.9 percent weekly advance.

“We just had gains that is probably a year’s worth in just
2 1/2 months. People are feeling a little extended, and there
is psychological and technical resistance out there,” said Marc
Pado, U.S. market strategist at Cantor Fitzgerald & Co in San

“Will today’s decline development into something on the
down side? Probably not, but we’ve got to keep watching where
the dollar is headed. No matter how you slice it, the dollar is
critical to this rally, especially post-Fed.”

The dollar (.DXY: ) was up 0.6 percent against major
currencies on renewed worries about budget problems in Ireland
and other debt-weakened euro zone members. Since the euro zone
debt crisis, a popular trade has been to sell the S&P 500 when
the euro falls against the dollar.

The Dow Jones industrial average (.DJI: ) was down 45.94
points, or 0.40 percent, at 11,398.14. The Standard & Poor’s
500 Index (.SPX: ) was down 3.24 points, or 0.26 percent, at
1,222.61. The Nasdaq Composite Index (.IXIC: ) was down 0.49
points, or 0.02 percent, at 2,578.49.

Analysts said the G20 meeting, which will be hosted in
South Korea on Thursday and Friday, will be the next catalyst
in moving the dollar.


The S&P 500 faces strong resistance around 1,228, which
would retrace 61.8 percent of the decline between its historic
highs in 2007 and the 12-year low in March 2009. This is one of
the Fibonacci retracements that chartists widely follow and
many times coincide with buying or selling markers.

In April, a first attempt to breach that level failed and
preceded a decline that took the index to its 2010 low in early

Declines in bank shares could go beyond profit-taking from
last week’s gains. The Fed’s pledge to keep interest rates near
record lows was viewed as hurting bank profits.

“Negative interest rates are not healthy for financial
stocks, and banks still have a lot of bad debt on their books,”
said Bruce Bittles, chief investment strategist at Robert W.
Baird & Co in Nashville.

“I would think (financials) would continue to underperform
as opposed to the tech sector, where balance sheets are a lot
more healthy and earnings growth is a lot more visible.”

Gains in technology stocks, including Apple Inc (Read more about Apple stock future.) (AAPL.O: ),
up 0.5 percent to $318.80, and the semiconductor sector
(.SOXX: ), up 0.2 percent, kept the Nasdaq near break-even.

Intel Corp (INTC.O: ) added 0.5 percent to $21.34 after UBS
raised its rating on the world’s largest chipmaker and said it
expects Intel’s next generation processors to drive growth in
2011. [ID:nSGE6A70OY].

Shares of coal producers rose on strong global demand for
steel-making coal and renewed talk of mergers.

Shares of Alpha Natural Resources (ANR.N: ) rallied 7.3
percent to $47.70, while Arch Coal (ACI.N: ) gained 5 percent to
$29.71. Consol Energy (CNX.N: ) rose 3.8 percent to $40.79.
(Reporting by Angela Moon, Editing by Kenneth Barry)

US STOCKS-Wall St retreats, led lower by financials