Dow Watch: Correction Talk

(At 12:07 p.m. EDT)

It looks as though the Dow doesn't like the weather in New York, either.

Nearly all 30 of the Dow Jones Industrial Average's components were in negative territory Monday, led by sharp declines in Alcoa (AA Quote) (down 7.6%), Bank of America (BAC Quote) (down 6.4%), and Caterpillar (CAT Quote) (down 4.4%).

The only winners on the Dow lately were Wal-Mart (WMT Quote) and Verizon (VZ Quote), which added 0.4% and 0.3%, respectively.

There wasn't much in terms of stock-specific news for the Dow's 30 components aside from Exxon Mobil (XOM Quote). Shares were down 2.7% even after the company said it is nearing agreement on its liquefied natural gas project in Papua New Guinea.

With so many Dow members falling on no headlines, the question now is whether this is a temporary setback or whether the Dow is in correction mode. The index is only marginally higher than it was four weeks ago, and the dominant view now is that a correction is on its way. That is, unless the economic data begin to rebound meaningfully as opposed to being "less worse" than they have been in previous months.

It doesn't help that economist Nouriel Roubini, known in some circles as "Dr. Doom," told CNBC that he expects that the unemployment rate may reach 11% in the U.S. and around 10% in Europe in the coming months. Additionally, Roubini argued that rising oil prices, which he expects to be closer to $100 a barrel towards the end of this year, as well as rising interest rates will lead to bad macroeconomic data and poor earnings.