Market Snapshot November 19, 2009, 4:40PM EST

Stocks Fall on Stronger Dollar, Weak Techs

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In Washington, Treasury Secretary Timothy Geithner said Thursday the government's $700 billion bailout program will end "as soon as we can," and that part of it will be used to lower the soaring federal debt.

During a sometimes contentious Joint Economic Committee hearing that included one lawmaker calling on him to resign, Geithner was pressed to disclose the administration's plan for dealing with the unpopular financial rescue program.

"We are winding it down and will close it as soon as we can," Geithner said of the $700 billion bailout fund, known as the Troubled Assets Relief Program. Congress approved TARP at the height of the financial crisis in October 2008 as a way to supply banks with fresh capital.

President Barack Obama told Chinese leaders this week the U.S. expects to see progress by next year on making the yuan's exchange rate "more flexible," Ambassador Jon Huntsman said Obama in meetings in Beijing with President Hu Jintao and Premier Wen Jiabao said the U.S. wants progress on issues including the exchange rate by next summer, when talks between the U.S. State and Treasury secretaries and their Chinese counterparts are scheduled in the city, Huntsman said in an interview with Bloomberg Television.

In other economic news Thursday, U.S. mortgage delinquencies continued to climb in the third quarter, rising at a 9.64% seasonally adjusted rate (for 1-4 unit residential properties). That's a new record, besting the previous 9.24% clip in the second quarter, and a 9.12% pace in the first, according to the Mortgage Bankers' Assn.

Fed officials downplayed the consequences of the falling U.S. dollar, underscoring that deflation is still a threat, especially with commercial real estate prices falling. Dallas Fed President Richard Fisher said in an interview with Market News International that the weakening dollar, which hit a 15-month low against major currencies on Monday, is only one of the factors the Fed watches when setting policy. "You pay attention to this," Fisher said in reply to a question about the effects of a weaker dollar. "On the other hand, in terms of its inflationary input, unless it becomes disorderly, a depreciating dollar -- a gradually depreciating dollar -- doesn't necessarily add an enormous inflation impulse."

Philadelphia Fed President Charles Plosser, answering journalists' questions after a speech in Singapore, was also not worried about dollar weakness. "There's no particular reason you wouldn't expect the dollar to go back to where it was before the panic set in -- that is essentially all it has done at this point. I don't view that as anything particularly of concern," he said.

The OECD raised its global growth forecast for next year to 3.4% from the 2.3% it was predicting as recently as June, after an estimated contraction of 1.7% in 2009. In June, the OECD was predicting growth of less than 1% in 2010 in all three regions and for the 30 OECD member countries as a whole. It now sees GDP growth of 1.9% in 2010 and 2.5% in 2011, after a contraction of 3.5% in 2009. U.S. growth, measured by gross domestic product, should rise 2.5% in 2010 after a contraction of 2.5% in 2009, and rise a further 2.8% in 2011, the OECD said. Euro zone GDP should rise 0.9% in 2010 and 1.7% in 2011 after a downturn of 4.0% in 2009, it said. Japan could expect GDP growth of 1.8% in 2010 and 2.0% in 2011 after a drop of 5.3% in 2009, it said.

The OECD forecast growth of more than 10% in China this year due in large part to massive stimulus that it believes maintained GDP growth at more than 8% in 2009, when output was shrinking across the West. India, which likewise weathered the crisis with growth of an estimated 6.1% in 2009, could expect 7.3% growth next year and a bit more in 2011, while Brazil, another fast developer, was headed for growth of 4.8% in 2010.

Andrews is managing editor of the Investing Channel for BusinessWeek.com .