Stocks, Commodities Hit As China Looks To Curb Record Lending

U.S. stocks are weak today as investors react to news from China that bank regulators there are telling some banks to pare lending after a record 9.6 trillion renminbi, or U.S. $1.4 trillion, in new loans in 2009.

Chairman of the China Banking Regulatory Commission, Liu Mingkang, expects the nation's banks to extend 7.5 trillion renminbi, or U.S. $1.1 trillion, in loans this year which is down nearly 22 percent from last year's record amount.

In a press conference, Mr. Liu said China will continue to control the pace and demand of the credit supply. He said regulators will pay close attention to loans for local governments and real estate.

Shanghai Composite fell 2.93% today on the comments. The Hang Seng fell 1.81%.

At 11:35AM, the Dow is down 187 points, the Nasdaq is down 43 and the S&P 500 is down 19. If this losses remains, it will be the biggest decline since November.

The U.S. dollar is stronger, while commodities are weaker on the China news. Among commodity ETF losers SPDR Gold Shares (NYSE: GLD) is down 2.5%, Market Vectors Coal ETF (NYSE: KOL) is down 3.8%, Market Vectors Steel ETF (NYSE: SLX) is down 4.1% and United States Oil (NYSE: USO) is down 2%.

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