The good feelings that many had developed over the last couple weeks about a package of reforms and bailouts for Greece, banks and European bonds took hits the last couple days on various news stories that a firm package might be only partially done by tomorrow’s European leaders summit. That accounted for most of a 2% market drop today.
The other issue was 3M’s earnings and some others that provided poor visibility ahead. Amazon, including after-hours trading, lost 20% today on a bad earnings report.
There is starting to develop the idea that maybe our multinational companies are more affected by Europe’s decline into recession than we thought. China is also slowing down but no one knows how much since their #s are always suspect. That provided the rest of the reason for a decline today, not to mention that technically the market is at resistance, though resistance levels haven’t hurt the past two weeks.
If the European announcements tomorrow and the balance of the week are not reassuring, the market could give back quite a bit more of the recent advance.