falling U.S Stocks

U.S. stocks fell, snapping a three-day meeting over 500 of Standard & Poor's after Federal Reserve chairman, Ben S. Bernanke said the U.S. economy may need more stimulation.

Bank of America had the biggest drop in the Dow Jones Industrial Average after Nomura Holdings Inc. said the lender runs the risk of credit downgrades in 2011. SanDisk Corp., the world's largest maker of flash memory cards, fell by 2.1 percent after ThinkEquity downgraded LLC for the population. Cisco Systems Inc. rose 2.1 percent after Oppenheimer & Co. upgraded the rating of the largest manufacturer of computer networking.

The S & P 500 fell 0.1 percent to 1,223.77 as of 10:30 am in New York. The benchmark for U.S. stocks increased by 3.7 percent in the last three days. The Dow Jones fell 2.23 points, or 0.1 percent down at 11,379.86.

"There is much to worry about," said Bruce McCain, who oversees 25 billion U.S. dollars as chief investment strategist of the private banking unit of KeyCorp in Cleveland. "The question is - what will take us higher from here especially in light of high unemployment in the U.S. and trouble brewing in Europe. There is much skepticism. While you are receiving financial reports and Corporate pretty good, investors are still unsure about whether to adopt a more aggressive or defensive. "

U.S. stocks rose last week, sending benchmark indexes to their biggest gains in a month, amid improved economic data and the efforts made by the European Central Bank to halt the crisis in the region of the debt. The benchmark for U.S. equity rose 20 percent from its low in July 2010 through December 3 as corporate profits and improving the Federal Reserve expanded its asset purchase program to suppress interest rates and fuel the economic recovery.

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Bernanke said the economy barely expands to a more sustainable pace and that it is possible that the Fed could expand the purchase of bonds beyond the $ 600 billion announced last month to stimulate growth. He defended the Fed's efforts to bolster a recovery so weak that only 39,000 jobs created in November. The unemployment rate last month climbed to 9.8 percent, the highest since April, the Labor Department said the December 3, three days after Bernanke's interview was recorded.

"We're not far from the level at which the economy is not self-sustaining," Bernanke said in an interview broadcast yesterday by the CBS Corp. s "60 Minutes" program. "It's very close to the border. It takes about 2.5 percent growth just to keep unemployment stable and that's what we're getting."

The Dow Jones fell to 0.4 percent on Friday after the Labor Department said U.S. payrolls increased by 39,000 last month, behind the median forecast of economists in a survey of an increase of 150,000 jobs. The unemployment rate rose to 9.8 percent from 9.6 percent.

"Stall speed"

"That's what everyone is dealing with - where we expect a continued sustained recovery, which is still in the stall speed and you're not getting the recovery you want," said William E. Stone, who oversees about $ 105 billion as chief investment strategist at PNC Wealth Management in Philadelphia. "There is also a hangover from the payrolls report. The numbers were bad and you still have to wait for more evidence that things are improving."

European officials expressed disagreement on steps to stem the debt crisis that Germany is opposed to raising 750 million euros ($ 1,000,000,000,000) rescue fund and the introduction of the joint European bonds. Belgian Finance Minister Didier Reynders told reporters on Dec. 4 that the fund could be extended if the ministers decide to introduce a larger facility when the time expires permanently. Luxembourg and Italy today called for joint development of European bonds. Both proposals were rejected today by German Chancellor Angela Merkel.

Banks decline

European banks fell, sending financial shares U.S. lower. Bank of America fell 0.8 percent to $ 11,764, while Regions Financial Corp. fell 2.1 percent to $ 5.95.

Bank of America, Morgan Stanley and Citigroup Inc. are more at risk of being downgraded by credit rating companies in early 2011, Nomura said. The company cited the pace of recovery, the threat that banks will have to re-purchase mortgages to investors, the crisis of European government debt, reducing the balance sheet and regulatory reform.

SanDisk fell 2.1 percent to $ 47.31 after being downgraded to "hold" from "buy" ThinkEquity. The estimated share price of 12 months is $ 48.

Dollar General Corp. fell 7.6 percent to $ 30.89. The discount retailer with 9,000 stores reported more than 25 million shares will be sold by members of senior management and an entity linked to the directors of the Nashville, Tennessee-based company.

Cisco gained 2.1 percent to $ 19.47 after being raised to "overweight" from "market perform" at Oppenheimer. The 12 - share price estimate is $ 23 month.