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May 23, 2013  Thu 7:14 AM CT

SPX: SEE CHART GET CHAIN FIND STRATEGIES
Stocks are falling today as a global selloff hits equity markets.

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 percent.

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 stimulus.

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 "shooting star" 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 upside.

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 forecast.
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