Stocks are down again today, raising concerns that a long-awaited correction may be at hand.
S&P 500 futures are down about 0.6 percent. European indexes are down more than 1 percent, led by steeper losses in the higher-risk countries of Italy and Spain. Asia was mostly negative overnight, with Tokyo down 2 percent as the Japanese yen rallied.
The SPX declined 0.9 percent yesterday after trading down at one point by as much as 1.35 percent. The selloff came after the index made a double top at 1850 on Jan. 15, followed shortly thereafter by a lower high, potentially signaling a reversal. Momentum has also been slowing and bond yields falling, potential signs that investors are tiring of equities. The safe-haven Japanese yen, which tends to move in the opposite direction as stocks, has been strengthening for the last three weeks as well.
Traders are now likely to view 1810 as support for the S&P 500, and selling may intensify if it breaks.
While most observers would have expected attention to focus on corporate earnings this week, headlines from overseas have rattled confidence. China spooked the bulls yesterday with a poor manufacturing number, and Turkey has been shaken by an ongoing corruption scandal. In addition, currencies associated with global growth, such as the Australian dollar, Canadian dollar, and Argentine peso, have been plummeting.
That's lifting gold by half a percent today and silver by more than 1 percent, raising the possibility that precious metals have finally bottomed after a 2-3 year selloff. (Gold and silver miners are also among the best performers in the last month, according to optionMONSTER's proprietary researchLAB market scanner.)
Technology companies continue to report strong results. Microsoft, Juniper Networks, KLA-Tencor, and Altera are all indicated higher after beating expectations yesterday afternoon. But Xerox is down 4 percent this morning on a weak revenue number this morning. Honeywell is little-changed after surpassing estimates, while Procter & Gamble edged lower after sales missed forecasts. No economic releases are scheduled for today.
Energy futures are mixed, with oil down fractionally but natural-gas surging another 5 percent. Agricultural products are mostly lower. Trading is bearish in foreign-exchange markets as the Japanese yen continues to gain ground against every other major currency.
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