Stocks continue retreat from highs


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Stocks are edging lower this morning, continuing their pullback from record levels yesterday.

S&P 500 futures are off less than 0.2 percent. European markets are down slightly more, led by the more-volatile Italian and Spanish indexes. Asia was modestly lower in the overnight session.

The S&P 500 fell almost 0.4 percent yesterday after trading above 1800 for the first time ever. Billionaire and veteran investor Carl Icahn partially triggered the selling by saying he was "very cautious on equities," adding: "This market could easily have a big drop."

Stocks have been advancing all year as money comes off the sidelines, supported by an improving economy and low interest rates. Our researchLAB market scanner shows that economically sensitive sectors such as transports, industrials and consumer discretionaries have led in the last month.

There also seems to be a shift recently toward international and emerging market stocks--especially China, South Korea, and India. The Nasdaq 100 and Russell 2000 small-cap index have lagged.

Earnings are the main items to guide sentiment this week. Home Depot is indicated to open at new all-time highs after reporting strong results and raising guidance. Best Buy and Urban Outfitters are down after saying that promotions will hurt margins this holiday season. Trina Solar is surging more than 10 percent, continuing the wave of positive news in the green-energy space.

Bank of Japan releases its monetary policy this evening, followed by U.S. retail sales tomorrow morning and minutes from the last Federal Reserve meeting tomorrow afternoon.

Commodities and currencies are mixed today. Oil is down fractionally, but copper and the Australian dollar are both edging higher--a sign of confidence in the global economy. The euro, Japanese yen, and precious metals are up slightly, while most agricultural products are lower.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.

This article appears in: Investing , Options

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