(INDEXSP:.INX) hit a record high for the fourth day in a row on
Monday morning, but the bears pounced to put stocks in the red.
US stock futures were up early this morning, following positive
action in overseas markets as China recently announced a number of
pro-growth initiatives, including an easing of the one-child policy
and an allowance for private investment in state-run companies.
And shortly after the open, the S&P broke the 1800 mark for the
first time ever, hitting 1802.33.
At 10:00 a.m. EST, the November NAHB Housing Market Index was
reported, coming in at 54 vs. the 56 consensus, though housing
stocks actually rallied following the release of the number.
Elsewhere on the economic front, William Dudley, President of the
Federal Reserve Bank of New York, gave a speech indicating that he
was optimistic about the economy, expecting an acceleration of
growth in 2014 and 2015. This could indicate that the Fed is closer
to curbing its quantitative easing activities, which are currently
running at $85 billion per month.
That notion drove the dollar higher and commodities lower, which
typically indicates a "risk-off" posture.
And that would make sense within the context of today's market
action, as we saw significant deterioration in bull-friendly areas
of the market. Momentum stocks like
) were absolutely clobbered, dragging down the
(INDEXNASDAQ:.IXIC), while financials and the aforementioned
housing names gave up early gains to finish lower.
One important factor in the sell-off was Carl Icahn's statements at
the Reuters Global Investment Outlook Summit. Mr. Icahn said he was
very cautious on stocks, and that the market could easily see a big
drop. That news hit the wires just after 3:00 p.m. EST, setting off
a wave of selling that took the S&P down to 1791.53, a decline
of 0.37% on the day.
However, it must be noted that the market was showing signs of
stress before the Icahn news, including the turnaround in housing
names, so it's possible that a decline was destined following an
impressive advance in recent days.
Tomorrow's Financial Outlook
At 8:30 a.m. EST, the third-quarter Employment Cost Index will be
released. Surveyed economists expect a reading of 0.5%. It is
unlikely to have a significant impact on trading.
However, earnings reports from retailers
) are on tap tomorrow and could give traders insights on spending
trends as we head toward the close of the year.
Many market participants are already looking ahead to Wednesday, at
which point a wealth of data will be released, including retail
sales and CPI. And of course, we will also receive the FOMC minutes
from the October meeting, which could give us insight into why the
Fed chose not to taper the QE program.