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Stocks Pull Back After Brief Bernanke Boost

Sometimes, there's just nothing you can say to lift someone's mood.

Stocks retreated Monday after a brief boost from comments from Fed chief Ben Bernanke tamping down worries about interest rates.

After an encouraging jobs report on Friday, which showed just 11,000 jobs were lost in November, investors began to worry that the Fed would raise rates sooner than expected, which sent the dollar higher and stocks lower.

Bernanke helped cool things down temporarily, saying it's still too soon to tell if the recovery will last.

We still have some way to go before we can be assured that the recovery will be self sustaining," Bernanke said in prepared remarks to the Economic Club of Washington.

But it was no consolation for the market, which resumed its descent, led by financials, technology and energy.

Fed-funds futures are currently showing about a 54-percent chance of a rate increase at the June policy meeting, down from 72 percent on Friday.

The dollar remained lower, after hitting a five-week high against the euro earlier. Oil was trading below $75 a barreland gold was around $1,160 an ounce, after setting a record above $1,200 last week.

New York Fed President William Dudley also has a public appearance his schedule today, though that doesn't come until after the markets close. He'll speak to a Columbia University audience at 5:45 pm.

Only one economic number is on the schedule for today and that doesn't come until 3 pm, when the government issues consumer credit figures for October. Economists think outstanding credit shrank by $10 billion during the month, compared with a drop of $14.8 billion in September.

Winterizing Your Portfolio - A CNBC Special Report
Winterizing Your Portfolio - A CNBC Special Report

The big buzz this morning was that the government slashed its projected lossfrom the TARP program — $42 billion instead of more than $200 billion.

According to published reports this morning, the government will announce that estimate losses from the TARP program should come in around $42 billion, or around $200 billion less than originally estimated.

Bank of America last week announced that it had raised almost $19.3 billion in a stock offering, which it plans to use to help pay back the $45 billion it owes the government in TARP funds.

Now, Citigroup is trying to persuade the government to let it pay back $20 billion in taxpayer funds, the Financial Times is reporting. It wants to do so before a window to launch a share sale shuts next week.

AIG was back in the news: Five executives may quitas they are unhappy with recent pay cuts.

Boeing led the Dow pack following news that, after countless delays, the Dreamliner 787 will take its first test flight as early as next week.

American Express was one of the biggest gainers on the Dow after Bank of America-Merrill Lynch upgraded the stock, along with Capital One and Discover, to "neutral" from "underperform."

Kraft rose after Cadbury said it would formally reply to Kraft's $16 billion offer on Dec. 14.

Shares of New York Community Bancorp jumped after the company said it will issue 60 million shares publicly. The comes in conjunction with its Friday's purchase of certain assets and deposits from AmTrust bank on Friday and will help bolster regulatory capital levels.

In tech land, chip makers AMD and Nvidia jumped after Citigroup raised its price target on the stocks.

Sprint Nextel shares gained after Barron's said the company's stock was undervalued and could rise as much as 50 percent as the subscriber base increases.

This Week:

MONDAY: Copenhagen climate summit; Fed's Bernanke, Dudley speak; consumer credit
TUESDAY: CIT bankruptcy hearing; GE capital investor meeting; 3-year auction
WEDNESDAY: BoE meeting; AOL spinoff; weekly mortgage applications; Madoff hearing; weekly crude inventories; 10-year auction
THURSDAY: BoE rate decision; AOL shares begin trading; international trade; weekly jobless claims; 30-year auction; Earnings from Costco
FRIDAY: Government report on retail sales; import/export prices; business inventories; Art Nadel hearing

Send comments to cindy.perman@nbcuni.com.