Stocks are down again today, trying to find support after hitting new highs last week.
S&P 500 futures are down about 0.2 percent after climbing earlier in the session, while European markets are posting small losses and stand near their lows of the day. Asia was mostly negative overnight, with the exception of a 1 percent gain in Shanghai. A strong Japanese yen is weighing on sentiment.
Economic reports continue to show improving global growth. Today, for instance, the HSBC purchasing managers index for China showed manufacturing at its strongest level in six months, while a similar report from Europe gave its highest reading in more than two years. German Chancellor Angela Merkel was also solidly reelected over the weekend, indicating political stability in Europe's biggest economy.
But uncertainty remains in the United States after the Federal Reserve shocked markets last week by failing to reduce bond purchases. That increases the importance of speeches by Fed officials William Dudley and Richard Fisher at 9:30 a.m. ET and 1:30 a.m. respectively. There is also risk of a government shutdown as House Republicans seek to defund Obamacare by the start of the next fiscal year on Oct. 1.
The Fed's surprise move on Wednesday drove the S&P 500 as high as 1729, but the index fell on Thursday and Friday--its first two-day decline since late August. Price action has generally reflected confidence on economic growth, with transports, materials, and industrials all outperforming over the last week and last month.
The higher yen is the main story in foreign-exchange markets as the Japanese currency attempts to break free of a four-month consolidation pattern. The euro is also modestly lower. The Australian dollar, a bellwether for China and global growth, is bucking the cautious trend with a gain of more than one-third of a percent.
Commodities show risk aversion. Copper and precious metals are down about 1 percent. Oil fell one quarter of a percent and most agricultural foodstuffs are lower. Bond futures also fell, pushing interest rates higher before today's Fed speakers.
In company-specific news, Citigroup (C) is down almost 2 percent after the Financial Times reported that the company faces a big drop in trading revenue. BlackBerry (BBRY) is indicated lower by another 5 percent after announcing a big charge and layoffs last week.