Stocks are falling today as a global selloff hits equity
S&P 500 futures are down almost 1 percent, while European
indexes are lower by about 2 percent. The real declines came in
Asia, where Japan's Nikkei plunged 7 percent and Hong Kong shed 2.5
The weakness follows a weak purchasing-managers report from China,
which showed a contraction in the country's manufacturing sector
for the first time in seven months. Nerves were also on edge
yesterday when comments from Federal Reserve officials in the
United States suggested that the central bank will slow monetary
The S&P 500 had traded to a new record high earlier in
yesterday's session, but then reversed and closed lower--resulting
in a "
" chart pattern that some technicians consider a sign of a
reversal. Even before the drop, internals of the market showed
slowing momentum as transports lagged and health care led to the
The question now facing investors is how much of a pullback to
expect before putting money to work again. (Support could be found
around between 1627 and 1633 on the S&P 500, a consolidation
range from earlier this month.)
Initial jobless claims at 8:30 a.m. ET and new home sales at 10
a.m. could affect sentiment as well.
Commodities are mostly bearish, led by a 2 percent drop for copper
and a 1 percent decline for oil. Gold and agricultural foodstuffs,
however, are higher.
The main trend in the foreign-exchange market is yen strength
across the board as the Japanese currency rebounds from months of
weakness. But the euro is modestly higher against the U.S. dollar,
which is potentially bullish.
In company-specific news, technology stalwart Hewlett-Packard is
indicated higher by 12 percent after reporting strong profit and
raising its guidance. Pacific Sunwear of California also rallied
after is revenue beat forecasts and management issued a strong
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