Stocks Fall on Citi Stock Sale, FedEx Forecast

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National Beef Inc. postponed its initial public offering, the seventh U.S. company to do so this quarter, after underwriters failed to drum up enough interest in the shares at $15 to $17 each, Bloomberg data show. Investors extracted price cuts from three private equity-backed IPOs this week.

FedEx Slides

FedEx lost 6.1 percent to $84.47, its steepest decline since March. Earnings for the three months ending in February will be in a range of 50 cents to 70 cents a share, the company said. Analysts forecast 84 cents, based on the average of estimates compiled by Bloomberg. Economists consider FedEx a bellwether because it moves goods ranging from industrial parts to apparel.

Goldman Sachs slid 2.5 percent and Morgan Stanley dropped 4 percent after Whitney, the analyst known for correctly predicting Citigroup's dividend cut last year, reduced earnings estimates for the companies through 2011, citing slower client trading activity in the current quarter.

Discover Financial Services (DFS) dropped 9.1 percent to $14.92, the biggest decline in the S&P 500. The credit-card lender that took $1.2 billion from the U.S. bank bailout fund said profit fell 16 percent in the fourth quarter as credit-card defaults increased.

Stock-Market Stimulus

The biggest stock market advance in seven decades is reducing the need for additional government stimulus measures, according to former Fed Chairman Alan Greenspan.

The S&P 500's 64 percent jump from March 9 through yesterday made Americans richer by restoring $5.4 trillion to U.S. equities and helped spur a 1.3 percent increase in retail sales last month, data compiled by Bloomberg and the Commerce Department show.

"The stimulus is only a third spent, and its order of magnitude is not large enough to compare with the strength and power of the remarkable global equity increase that's occurred since early March," Greenspan, 83, said in a telephone interview yesterday from Washington. "Capital gains have proved a far greater stimulus than one can attribute to the $787 billion program that has been only partially spent."

Commodities, Dollar

Raw-materials companies in the S&P 500 fell 2.3 percent as a group, the biggest drop among 10 industries, as an increase in the value of the U.S. currency pushed down prices of dollar- denominated commodities including aluminum, copper and gold.

Alcoa Inc. (AA), the biggest U.S. aluminum producer, slid 2.7 percent to $14.50. Barrick Gold Corp. (ABX), the world's largest gold producer, fell 3.8 percent to $38.39.

Allegheny Technologies Inc. (ATI) rose the most in the S&P 500, jumping 5.6 percent to $40.20. The specialty-metals producer said it will earn at least 20 cents a share in the fourth quarter. Analysts surveyed by Bloomberg had estimated profit of 3 cents on average.

Harley-Davidson Inc. (HOG) dropped 4.8 percent to $25.59. The biggest U.S. motorcycle maker was added to Goldman Sachs Group Inc.'s "conviction sell" list. The brokerage cited "near-term downside on retail sales."

To contact the reporter on this story: Elizabeth Stanton in New York at estanton@bloomberg.net

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