.gif)
US stocks slumped Tuesday as recovery concerns festered following Federal Reserve chairman Ben Bernanke's sobering assessment of the economy and warnings about sovereign credit ratings hurt sentiment.
The Dow Jones Industrial Average dropped 104.14 points (1.00 percent) to close at 10,285.97.
The Nasdaq composite fell 16.62 points (0.76 percent) to 2,172.99 and the broad-market Standard & Poor's 500 index retreated 11.31 points (1.03 percent) to 1,091.94.
Several factors bore down on the market, among them the firming dollar and sovereign credit rating concerns, analysts said.
The Fitch rating agency on Tuesday downgraded Greece's long-term debt ratings as well as those on four of the country's largest banks, describing prospects for Greek public finances as negative.
"Stocks spent the entire session mired in weakness as cautionary comments about the US debt rating and strength in the US dollar weighed on the minds of participants," Briefing.com <http://briefing.com/> analysts said in a note to investors.
Ratings agency Moody's warned on Tuesday of a "fiscal crisis" lasting "several years" in Britain, France, Germany and the United States, but saw no immediate threat to their top AAA credit assessments.
The market also continued to react to Bernanke's signal in a speech Monday that essentially zero interest rates would be kept for some time amid a fragile recovery facing "formidable headwinds," particularly from high unemployment and tight credit.
"The Fed chair's speech has taken some of the wind out of the bulls' sails following a much stronger-than-expected November payrolls report" last Friday, said Joseph Hargett of Schaeffer's Investment Research.
Among stocks in focus, 3M shares shed 1.03 percent to 77.11 dollars after the diversified industrial group projected 2009 annual earnings per share below analyst expectations.
Fast-food giant McDonald's also dealt a blow to sentiment after saying US sales fell for the second consecutive month. Shares tumbled 2.13 percent to 60.61 dollars.
The negative news from the two Dow components was "exacerbating the economic concerns and also weighing on sentiment," Charles Schwab & Co. analysts said in a note to investors.
"Strength in the dollar weighed considerably on commodities this session," Briefing.com <http://briefing.com/> analysts said in an investor note.
Exxon Mobil fell 1.11 percent to 72.95 dollars and Chevron dropped 1.80 percent to 76.76 dollars.
Heavy equipment maker Caterpillar slid 2.05 percent to 56.38 dollars.
Financials suffered after downbeat comments by Meredith Whitney, a closely watched analyst.
Bank of America plummeted 3.02 percent to 15.41 dollars and Citigroup dropped 2.98 percent to 3.91 dollars.
UAL, the parent of United Airlines, rose 0.41 percent to 9.87 dollars after the carrier announced it would buy 25 Airbus 350s and 25 Boeing 787s, with options to buy 50 more of each. Boeing slipped 0.29 percent to 55.66 dollars.
FedEx leapt 2.70 percent to 89.88 dollars. The shipping and logistics firm raised its second-quarter earnings per share estimate, citing a rebound in deliveries.
Bonds gained. The yield on the 10-year Treasury bond slipped to 3.392 percent from 3.448 percent Monday and that on the 30-year bond fell to 4.380 percent from 4.406 percent. Bond yields and prices move in opposite directions.
