Stocks are falling again today amid heavy selling in Europe.
S&P 500 futures are down almost 0.75 percent, while markets
across the Atlantic are down 1 percent to 2 percent. Asia was
mostly negative in the overnight session, with Japan and China down
less than 1 percent but Korea and Thailand rebounding.
Today's declines began after a low inflation reading in Europe
caused speculation that the region's central bank will ease
monetary policy at its meeting next Thursday. That's hurting
sentiment toward all currencies associated with risk, especially
those from emerging-market countries that have struggled in recent
The Australian dollar, Brazilian real, Turkish lira, Russian
rubble, and South African rand are all lower, while safe-havens
such as the U.S. dollar, Swiss Franc, and Japanese yen are up
across the board.
The S&P 500 now faces a key test as it attempts to hold its
recent low of 1770. The index has been consolidating around these
levels since falling sharply a week ago but is still above the key
100-day moving average that's provided support for the last year's
uptrend. A break of current levels could trigger further selling.
Investors are also bracing for major economic news next week. In
addition to the European Central Bank's meeting on Thursday, key
manufacturing data comes out Monday, followed by important
employment numbers on Wednesday and Friday. Corporate earnings
continue at a brisk pace as well.
Amazon.com is indicated lower by 7 percent this morning after
quarterly results missed expectations. Google is up 3.5 percent
after revenue beat expectations amid continued online advertising
growth. JDS Uniphase rose 6 percent after beating expectations and
issuing strong guidance. Zynga is rallying 17 percent and Tyson
Foods is climbing 7 percent on their numbers. Weak Barbie doll
sales have Mattel down 10 percent. Wal-Mart Stores fell 2 percent
after warning that fourth-quarter results will miss guidance.
Other companies reporting today include MasterCard, Chevron, Tyco,
LyondellBasell Industries, Newell Rubbermaid, and Legg Mason. The
Chicago purchasing managers index will be released at 9:45 a.m. ET,
and Chinese manufacturing data comes out late this evening.
Commodities are also reflecting caution as oil drops 1 percent and
natural gas declines 2.5 percent. Gold and silver are up half a
percent and a full percentage point respectively, while copper is
down half a percent--all consistent with risk aversion.
Agricultural products are modestly higher.