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Strong housing and retail sales data was not enough to jump start a wobbly market which declined by about 0.35% on the day.   Everything high beta was whacked on the day as the risk trade appears to be in doubt.  Tech and small caps were down over 1% on the day.

A number of high profile investors were out in the last 24 hours claiming that the rally is based on weak fundamentals, government stimulus and has now gotten very extended.  The market is now on its 10th distribution day in the last few weeks which is a clear sign that institutional money is moving out of stocks.  The dollar appears to have bottomed temporarily and the reversal in the Euro is a clear sign that risk trade might be coming off the table.  With no major catalyst coming in the next few weeks the government led rally could very well be coming to an end. Daily futures has the action from all markets:

U.S. Economy
The U.S. Treasury sold $44 billion of two-year T-notes at a median yield of .98%. The bid to cover ratio was 3.63, the most demand in over two years. The December 2010 eurodollars closed up .145 at 98.34.

The Conference Board’s index of consumer confidence fell from 53.4 to 47.4 in October, weaker than expected.

The Richmond Federal Reserve’s regional index of manufacturing fell from +14 to +7 in October, weaker than expected, but still a sign of expansion.

The Standard and Poor’s/Case-Shiller index of home prices in 20 cities was up 1.2% in August, but down 11.3% from a year ago. It was the fourth consecutive monthly increase.

Grains and Cotton
The southeastern U.S. is getting hit with more rain today. Late yesterday, the USDA said that the corn, soybean, and cotton harvests all remained well-behind their normal paces. December cotton finished down .36 at 67.05.

Today’s U.S. Palmer Drought Map shows excessively moist conditions throughout major portions of the Midwest. December corn closed down 7.25 cents at $3.707.

Is the pork market finally losing its fear of “swine” flu? December hogs closed up 1.97 at 55.42, the highest close in three months.

Orange juice
January orange juice ended up 2 cents at $1.1740 with ongoing support from this year’s smaller Florida orange crop.

Has there been a change of heart in the metals? December gold fell $7.40 to $1,035.40, the fourth consecutive day lower and the lowest close in three weeks.

The European Central Bank said that commercial bank lending in the Eurozone was down an annual rate of .3% in September, the first decline on record. The December euro closed down .0051 at $1.4806.

Source: DF