Wall Street losing ground on concern about US credit rating (AP) (15-03-2010)

NEW YORK (AP) -- Stocks fell Monday after Moody's Investors Service said the U.S. might eventually lose its top-notch credit rating.

Credit ratings agency Moody's said debt affordability is "most stretched" in the U.S. and Britain among countries with the top "AAA" rating. A drop in the credit rating could make it more expensive for the government to borrow money.

Beyond economic news, investors are awaiting details on a proposed overhaul of financial regulation. Sen. Chris Dodd, a Democrat from Connecticut and chairman of the Senate Banking Committee, is expected to present a bill Monday to remake bank rules.

In midmorning trading, the Dow Jones industrial average fell 18.29, or 0.2 percent, to 10,606.40. The Standard & Poor's 500 index dropped 0.26, or less than 0.1 percent, to 1,149.73, while the Nasdaq composite index fell 1.99, or 0.1 percent, to 2,365.67.

The dollar rose against other major currencies. Gold prices also rose. Crude oil fell $1.44 to $79.80 per barrel on the New York Mercantile Exchange.

The drop in stocks comes as investors await the Fed's regular interest-rate committee meeting Tuesday. While it is unlikely to raise a key interest rate from historic lows, traders will be looking for clues in the Fed's statement as to when it might make a move.

Investors have been factoring in an eventual rate hike, but any signs that the move will be made sooner rather than later is likely to -- at least in the short-term -- hurt stocks.

Two stocks fell for every one that rose on the New York Stock Exchange, where volume came to 118.1 million shares, compared with 170.9 million shares traded at the same point Friday.

The Russell 2000 index of smaller companies fell 1.84, or 0.3 percent, to 674.75.

Source: AP