Contributing to the weakness was famous speculator George Soros when he chimed in with his view that the rally was pretty much done.
Additionally, investor Mark Faber added fuel to the downside move by saying that that the S&P; 500 could drop as much as 10% to around 750, because the market had moved up too quickly.
As I pointed out yesterday, economic prospects do not look very inviting at this time, which means sudden moves to the downside remain a distinct possibility. Mish at Global Economics minced no words when he commented on the signs of the alleged recovery:
These “signs of recovery” that cheerleaders have been seeing are mostly nonsense. The stock market has been rallying because Treasury Secretary Geithner and President Obama are willing to screw taxpayers out of trillions of dollars for the benefit of banks. Such action will not reduce defaults, restore lending, or do a damn thing for cash strapped consumers out of a job with no job prospects.
I couldn’t have said it better myself.