European Stocks Move Lower

NEW YORK (TheStreet) -- Following the negative momentum seen over the last few days of trading, the European markets started declining from the first few minutes of trade, with most of the major European indexes down almost 1%, while S&P 500 futures were trading just above a three-months-old support trend line.

Every major equity market moved lower in early Wednesday trading. The heavyweights, Germany's DAX and London's FTSE, lost almost 2% as the vast majority of companies declined.

The selling in the global equity market comes as market participants consider the current rally as having outpaced, by a large margin, the prospects of the global economy to stage a dramatic continuation of growth. Since the lows touched in March, the global equity markets have surged close to 60%, making this rally one of the strongest on record in a time when the global economy is barely moving.

The automobile and parts sector, along with the basic materials sector, were the biggest drags on the European markets Wednesday, both declining more than 2%. Important declines also came from the construction and materials sector.

The DAX is heading lower for the fourth consecutive day, led by Infineon, which plunged 8% after rumors emerged that the company lost an important contract. Also in Germany, Daimler(DAI Quote), the maker of the luxury brand Mercedes, plunged 3% as it reported a drop of 80% in its third-quarter income. The selloff in the automakers sector started only after this report hit the newswires.

The European calendar was clear of any important reports Wednesday, but investors in the U.S. were preparing for reports on durable goods, new home sales and crude oil inventories. These reports are likely to have a strong impact on the market.

Crude oil was trading at $78.85 a barrel, lower by 60 cents.