Stocks Decline, Led by Financials, Energy

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Advances in the S&P 500 have ended this month when the index approached the 1,110 level, the highest close in more than a year reached on Nov. 25, said Scott Tapley, who helps oversee $2.5 billion at 1st Source Investment Advisors Inc. in South Bend, Indiana. The S&P 500 traded as high as 1,110.72 today.

"We walked our way up to that level again and then when Bernanke got done talking, we didn't go through it," Tapley said. "Since we're not going up, we've got to go down. It seems to me like it's technical-driven."

Financials Index

The S&P 500 Financials Index retreated 1.6 percent, the most among 10 industries. Wells Fargo lost 2.2 percent to $26.36. JPMorgan fell 1.2 percent to $41.25. Bank of America Corp. (BAC) slumped 2.4 percent to $15.89.

As the U.S. economy pulls out of a recession and the biggest banks return to profitability, mounting defaults on commercial property may keep regional lenders from repaying bailout funds until at least 2011.

Unpaid loans on malls, hotels, apartments and home developments stood at a 16-year high of 3.4 percent in the third quarter and may reach 5.3 percent in two years, according to Real Estate Econometrics LLC, a property research firm in New York. That's a bigger threat to regional banks, which are almost four times more concentrated in commercial property loans than the nation's biggest lenders, according to data compiled by Bloomberg on bailout recipients.

Delinquencies on commercial mortgage-backed securities increased to a record in the third quarter. The percentage of CMBS loans at least 30 days past due rose to 4.06 percent from 1.17 percent a year earlier, the Mortgage Bankers Association said today.

To contact the reporter on this story: Mary Childs in New York at mchilds4@bloomberg.net

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