YAHOO [BRIEFING.COM]: Stiff selling on heavy volume came as the greenback spiked against foreign currencies and financials faltered. Stocks now head into Friday with a week-to-date loss of nearly 1%.

The dollar made its way to a 1.1% gain against competing currencies after Standard & Poor's downgraded Greece's debt rating. It was the second reduction of its kind this week. Support for the greenback had the Dollar Index up as much as 1.4%, which put it at a new three-month high.

That proved to be a headwind for both stocks and commodities, which put materials stocks under the most pressure this session. The materials sector settled with a loss of 2.3%.

However, it was weakness in the financial sector that hampered the broader market. Financials, which make up 14% of the stock market's weight, fell 1.8%.

Pressure against financials followed several headlines, which began with news that Citigroup (C 3.20, -0.25) priced shares in its previously announced common stock offering at $3.15 each, a near 9% discount to the previous session's closing price. The low price tag even kept the Treasury from unloading its $5 billion of shares in the company.

Shares of investment banks and brokerages were sent to a 2.8% loss after highly regarded analyst Meredith Whitney lowered her earnings estimates for Morgan Stanley (MS 29.12, -1.22) and Goldman Sachs (GS 160.93, -4.06).

Meanwhile, consumer finance stocks dropped 3.3% in the wake of the latest quarterly report from Discover Financial (DFS 14.92, -1.50). The company posted earnings of $0.63 per share, including certain items, but saw an increase in its managed net charge off rate to 8.43%. It failed to win support, though, when it stated during its conference call that it feels much more confident that its TARP repayment will be sooner than later and implied that a capital raise would not be necessary.

FedEx (FDX 84.47, -5.48) also failed to inspire with its latest quarterly results. The global shipment company brought in earnings of $1.10 per share, which matched its preannouncement, but topped the consensus of $1.06 per share. However, FedEx expects third quarter earnings to range from $0.50 to $0.70 per share, which is shy of the current consensus of $0.84 per share. It also stated it expects earnings for fiscal 2010 to range from $3.45 to $3.75 per share, which brackets the current consensus of $3.46 per share.

Initial jobless claims for the week ending December 12 totaled 480,000, which is up 7,000 from the previous week and more than the 465,000 initial claims that had been widely expected. Continuing claims climbed 5,000 from the previous week to roughly 5.19 million, which is more than the 5.17 million that had been forecast by economists.

Selling pressure took a temporary reprieve with the midmorning release of the November Philadelphia Fed Index, which hit 20.4. The consensus had called for a reading of 16.0.

Leading indicators for November increased 0.9%, which is stronger than the 0.7% increase that had been expected.

By eclipsing 1.7 billion shares, trading volume on the NYSE hit its highest level in nearly three months this session. The heavy volume suggests that there was conviction behind this session's selling effort, though it comes one day ahead of tomorrow's quadruple witching options expiration. Nonetheless, selling culminated with stocks near their session lows and declining issues outnumbering advancers by more than 4-to-1.

Advancing Sectors: (None)
Declining Sectors: Materials (-2.3%), Financials (-1.8%), Consumer Staples (-1.3%), Consumer Discretionary (-1.3%), Tech (-1.2%), Industrials (-1.0%), Health Care (-0.9%), Telecom (-0.8%), Energy (-0.7%), Utilities (-0.6%)DJ30 -132.86 NASDAQ -26.86 NQ100 -1.3% R2K -1.1% SP400 -1.1% SP500 -13.10 NASDAQ Adv/Vol/Dec 717/1.93 bln/1966 NYSE Adv/Vol/Dec 845/1.72 bln/2203