Buy the Dip, Get Clipped

A sustainable bottom keeps eluding investors seemingly too eager to put money back into the stock market after the recent selloff.

Wednesday morning was no exception. Heavy selling pressure was again experienced overnight after Apple's (AAPL) sales fell short of expectations. Anticipating an Apple-induced swoon, bottom-fishers were there at the opening of trading but quickly got swept under by more deep-sea currents.

The Nasdaq Composite, after rising slightly to 2064 at the open, again took the lead to the downside. The tech-heavy index was recently down 1% at 2041.46

Semiconductor stocks were once more hit, this time after a downgrade of Intel (INTC) by Prudential, which also was bearish on the sector as a whole.

Only investors that had sought refuge in defensive stocks, such as pharmaceuticals, were able to stay above water. Pfizer (PFE), for one, was up 2.4% recently, after a U.K. court decision upheld the patent on its cholesterol-fighting drug Lipitor.

But Pfizer's gain wasn't enough to keep the Dow Jones Industrial Average above water. The blue-chip index was recently down 0.2% at 10,237, weighed down by a 2% decline in shares of Intel and a 1% decline in IBM (IBM).

As for the broader market, the same lack of sector leadership remained in place with two key sectors -- energy and homebuilding -- under pressure. The S&P 500 was recently down 0.4% at 1180.11. The Amex Oil index was down 1.7%, even though crude oil was gaining 57 cents to $64.10 per barrel. The Philadelphia Stock Exchange Housing Sector index was down 1.7%. Homebuilding star KB Home (KBH) fell 0.7% after reaching a marketing deal with Martha Stewart Living Omnimedia (MSO), which was down 4% in recent action.

It didn't help housing stock (and the market in general) that Federal Reserve governor Susan Bies reminded the market of the Fed's concerns about increased risk-taking in real estate lending, which the central bank is monitoring more closely. "When property values rise and the loan business grows increasingly competitive, bank supervisors tend to worry that more aggressive underwriting may set the stage for future deterioration in credit quality," Bies said in a speech.