* Bernanke says economy improving but faces headwinds
* Financials, Tech shares weigh; Citi down 2 pct
* Dow flat, S&P 500 down 0.3 pct, Nasdaq off 0.2 pct
* For up-to-the-minute market news, click []
(Updates to close)
By Angela Moon
NEW YORK, Dec 7 (Reuters) - The S&P 500 and Nasdaq ended
slightly lower on Monday and the Dow was flat, reversing
earlier gains, after comments by Federal Reserve Chairman Ben
Bernanke sparked jitters about the economic recovery.
Financial and technology shares were among the biggest
drags on the market. The S&P Financial Index <.GSPF> lost 1.6
percent while the KBW Bank Index <.BKX> shed 2.1 percent.
Speaking at the Economic Club of Washington, Bernanke said
inflation could remain subdued, but the U.S. unemployment rate
could remain elevated for some time. For details, see
[].
* To see the live broadcast, click on the link:
http://link.reuters.com/dyx25g
Initially the Fed chief's remarks lifted stocks and sent
the dollar lower, but later some investors pared positions.
Bernanke said the U.S. economy faces "formidable headwinds,"
including a weak labor market and tight credit conditions that
have persisted despite the Fed's efforts to support the
economy.
"Obviously there was an initial boost, but as people looked
more into it, they realized ... we do face 'formidable
headwinds,'" said Tim Speiss, partner at Eisner LLC in New
York.
The Dow Jones industrial average <> ended up 1.21
points, or 0.01 percent, at 10,390.11. The Standard & Poor's
500 Index <.SPX> lost 2.73 points, or 0.25 percent, at
1,103.25. The Nasdaq Composite Index <> fell 4.74 points,
or 0.22 percent, at 2,189.61.
Investors had been looking for a clue as to how the Fed
might unwind its economic stimulus efforts after a report on
Friday showed employers cut far fewer jobs than expected in
November were reassured.
Bank of America <BAC.N> closed down 2.4 percent at $15.89
and JPMorgan Chase <JPM.N> fell 1.2 percent to $41.25.
Citigroup Inc <C.N> shares ended down 2.2 percent to $4.03
on news that it is in a disagreement with the U.S. government
over how much money the bank should raise to exit the Troubled
Asset Relief Program. Negotiations between the bank and the
government may not be finished for weeks or months, according
to people briefed on the matter. []
"(In financials) there are still a lot of questions as to
how TARP recipient banks are going to pay back, the issue with
compensation, lots of things to point to," said Angel Mata,
managing director of listed equity trading at Stifel Nicolaus
Capital Markets in Baltimore.
On the Nasdaq, Microsoft Corp <MSFT.O> fell 0.6 percent to
$29.79 and Intel Corp <INTC.O> closed down 0.4 percent at
$20.37.
(Reporting by Angela Moon, Editing by Kenneth Barry)
