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Stock Market Update for 12/06/2010

December 6, 2010
US Market Updates
Profit Taking Contributes To Initial Weakness On Wall Street  

After turning in a strong performance last week, stocks are seeing modest weakness in early trading on Monday. The major averages have dipped below the unchanged line, with the Nasdaq pulling back off Friday’s nearly three-year closing high.stock market update

The weakness in the markets is partly due to disappointing comments from Federal Reserve Chairman Ben Bernanke, who said in an interview on CBS News’ “60 Minutes” that it could be four or five years before the unemployment rate falls to more normal levels.

Bernanke also said the Fed might consider increasing its government bond purchase program to more than $600 billion, if necessary, to support the economic recovery and facilitate job growth.

Traders are also keeping an eye on developments in Europe in connection with debt concerns, including the outcome of the meeting of the Euro Zone finance ministers to deal with the debt contagion.

In related news, rating agency Moody’s downgraded Hungary‘s sovereign credit rating by two notches amid rising concerns about the country’s fiscal sustainability and higher external vulnerabilities than its rated peers.

The country’s foreign and local currency government bond ratings were cut to Baa3, the agency’s lowest investment grade, from Baa1.

No major economic data is on tap for the day in the U.S., although reports on jobless claims, consumer sentiment, the trade balance and wholesale inventories are due out later this week.

In corporate news, pharmaceutical giant Pfizer Inc. (PFE) named Ian Read as its president, CEO and director after Jeffrey Kindler retired as CEO and chairman after more than four years at the helm of the company.

Swedish telecom equipment maker LM Ericsson Telephone Co. (ERIC) stated that chairman Michael Treschow plans to resign from his position in 2011 or 2012.

Biotechnology, electronic storage, and healthcare provider stocks are seeing early weakness, although selling pressure has remained relatively subdued. Meanwhile, gold stocks are extending a recent upward move amid an increase by the price of gold.

The major averages are currently posting modest losses, just off their lows for the young session. The Dow is down 27.96 points or 0.3 percent at 11,353.86, the Nasdaq is down 2.59 points or 0.1 percent at 2,588.87 and the S&P 500 is down 2.43 points or 0.2 percent at 1,222.28.

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