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"This Market is technically broken"


Wall Street set to drop at open as selling pressure mounts

http://finance.yahoo.com/news/futures-dip-global-economy-concerns-112951453.html

NEW YORK (Reuters) - U.S. stocks were set for a sharply lower open on Wednesday as economic data did little to stem worries over the health of the world economy or that corporate merger activity may be slowing.
The benchmark S&P 500 had eked a tiny gain at the close a day earlier following three sessions of declines spurred by concern over plunging oil prices, the potential impact of global economic weakness on U.S. earnings and the spread of Ebola.
The S&P (.SPX) has lost 6.6 percent since its Sept. 18 record closing high and is now up just 1.6 percent for the year, while the Dow (.DJI) is down 1.6 percent since Dec. 31.
Futures were little changed earlier Wednesday before dropping steeply in heavy trading, reflecting a recent jump in volatility in the equity markets.
Aside from concerns about the global economy, Chicago-based AbbVie (ABBV.N) said it was reconsidering its $55 billion takeover of the company weeks after the U.S. government moved to curb deals designed to reduce tax, throwing the vitality of merger and acquisition activity into doubt.
U.S.-listed shares of Shire (SHPG.O) tumbled 25.9 percent to $182.24 before the opening bell while AbbVie shares declined 4.1 percent to $51.90.
"This is the bottom line, the market is technically broken, expect this volatility because technically it needs to build a base again, so any news that would not necessarily have affected it as much will now affect it more - it’s amplified," said Ken Polcari, director of the NYSE floor division at O’Neil Securities in New York.
Economic data failed to ease concerns about a slowing global economy, as retail sales fell 0.3 percent in September, worse than an expected 0.1 percent decline. Producer prices fell in September for the first time in over a year, a sign inflation may be having difficulty gaining traction, while manufacturing activity in New York slowed to its weakest pace since April.
S&P 500 e-mini futures (ESc1) were down 22.75 points and fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract, indicated a sharply lower open. Dow Jones industrial average e-mini futures (1YMc1) fell 153 points and Nasdaq 100 e-mini futures (NQc1) lost 48.25 points.
As earnings season picks up speed, Bank of America shares (BAC.N) were off 0.7 percent to $16.42 in premarket after posting its third-quarter results.
Later in the session at 10:00 a.m., business inventories for August are due, while the Federal Reserve's Beige Book on business activity across the nation is expected at 2:00 p.m.
S&P 500 companies are expected to show earnings growth of 6.4 percent in the third quarter, according to Thomson Reuters data, with revenue growth expected at 4 percent.

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