CLOSING BELL

Dow 10603.15  -122.28, Nasdaq 2291.25  -29.15, S&P 1138.07  -12.19 

Despite better than expected earnings reports the markets came under heavy selling pressure on concerns that the global recovery may stall.  It started last night with China, instructing some of its banks to curb lending in order to meet capital requirements and prevent the country's economy from overheating. That news weighed on Asian markets and European bourses, since it could slow the global recovery.

That weighed on both stocks and commodities and even led investors to seek safety in the U.S. dollar.  Support for the dollar helped the greenback gain +1.1%, but it only exacerbated the drain stocks and commodities.

Positive earnings surprises were reported by IBM (IBM) 130.25, -3.89, Coach (COH) 35.35, -2.10, Wells Fargo (WFC) 27.82, -0.46, U.S. Bancorp (USB) 25.01, +0.52 and State Street (STT) 46.28, +3.08 were among the more widely-held companies to top expectations.  However, Morgan Stanley (MS) 30.63, -0.53 came short of the consensus earnings estimate and Bank of America (BAC) 16.49, +0.17 had a deeper-than-expected loss.

Economic data was mixed today.  The December Producer Price Index (PPI) increased + 0.2% month-over-month, which was higher than expected. Monthly producer prices had spiked +1.8% in November.  Excluding food and energy, producer prices for December were flat from the previous month.  

Housing starts for December hit an annualized rate of 557,000, which is a lower than the expected rate of 572,000 units.

However, building permits hit an annualized rate of 653,000 in December. That was far higher than the annualized rate of 580,000 permits that the consensus had predicted.

Advancing Sectors: (None)

Declining Sectors: Energy -1.7%, Materials -1.5%, Tech -1.5%, Telecom -1.4%, Industrials -1.3%, Consumer Discretionary -1.2%, Utilities -1.1%, Consumer Staples -1.0%, Health Care -0.5%, Financials -0.1%