Bulls Circle the Wagons

Clearly if someone yells "fire" in Asia, a rush for the exits happens around the world. Monday wasn't different, but once the cry hit American shores, investors seemed to respond as though it was just a fire drill.

A fresh round of gut-wrenching declines in Asian stock markets jerked U.S. stock market futures downward Monday morning. The Japanese yen strengthened further as the carry trade, in which investors borrow money in yen and invest it in higher-yielding assets, continued to unwind, raising questions about a liquidity crisis.

Europe's markets also had an ugly day, but registered only half of Asia's declines. The U.S. looked ready to swoon Monday morning, but the major indices staged a quick rally back into the green, and spent the day flip-flopping around the flat line before sliding into the close.

The bulls' stubborn resolve suggests the war is far from over but, in the end, the bears won Monday's battle.

The Dow Jones Industrial Average ended the day down 0.5% to close at 12,050.41 after trading as high as 12,189 intraday. The Dow is down 4.6% from last Monday's close. The S&P 500 fell 0.9% Monday, to close at 1374.12, while the Nasdaq Composite ended Monday down 1.2% to close at 2340.68. The S&P is down 5.2% since last Monday and the Nasdaq has fallen 6.5%.