Stocks Still Facing Pressure in Early Action

European markets are tanking anew; overnight in Asia, the Hong Kong's Hang Seng falls more than 7%.
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The stock market has yet to work out the selling pressure that led to yesterday's

carnage.

The market: Join the discussion on

TSC

Message Boards. By 9:05 a.m. EST, the

S&P 500

futures had given back much of their early strength, lately up 1.2 to 1413. That's a couple of points below fair value and indicates a modestly negative open for stocks. Which isn't a bad thing at all -- it's easy to get burned chasing a reflexive bounce following a selloff as intense and broad as yesterday's.

It matters that even the more bullish observers have been expressing unease with the hitherto-unchecked strength in the market's leadership. Some continued flushing out on the downside would help a lot of bulls feel a lot better about the next move higher.

"I can't tell you major damage hasn't been done," said Jim Volk, co-director of institutional trading at

D.A. Davidson

. "I just think this market still has some correcting to do. The volume yesterday was not enough to prove a temporary bottom. I'm not chasing any rallies this morning."

One stock experiencing some downside flushing this morning was

Amazon.com

(AMZN) - Get Report

, which was down about 10 points on

Instinet

after saying that a sharp increase in fourth-quarter sales wouldn't necessarily translate into lower net losses.

The bond market, whose selloff Monday triggered this week's weakness in stocks, was easing back from yesterday's

rebound. The 30-year Treasury was down 7/32 to 94 12/32, putting the yield at 6.559%. No major data are scheduled for release until Friday's

employment report

.

You wouldn't think a bounce was on the way by glancing at the action in global markets. The big European indices were selling off again in early afternoon trading, paced by the Paris

CAC

, off 138.56, or 2.4%, to 5533.46. London's

FTSE

was down 101.0, or 1.5%, to 6564.9, while Frankfurt's

Xetra Dax

was 80.89 lower, or 1.2%, to 6506.06.

The euro continues to rebound despite the battering taken by European equities, lately trading at $1.0355, up from yesterday's $1.0313. As expected, the

European Central Bank

left interest rates unchanged at its fortnightly meeting today.

Things got very ugly in Asia overnight.

Hong Kong's

Hang Seng

tumbled 1000 points within the first six minutes of trading and finally closed down a whopping 1226.10, or 7.2%, to 15,846.72. That's the worst single-day decline in that index since 1997.

In Tokyo, the

Nikkei

sank 460.31, or 3.8%, to 18,542.55. The dollar, lately trading at 103.61 yen, up from 103.29 yen late in New York yesterday, edged higher without another round of intervention by the

Bank of Japan

.

Other Asian markets followed suit. Singapore's

Straits Times

index plummeted 134.70 points, or 5.3%, to 2395.45, a one-day loss not seen in almost two years. And declines in

Hyundai Electronics Industries

and

Samsung Electronics

helped Korea's

Kospi

index to fall 72.72 points, or 6.9%, to 986.31.

For a look at stocks in the preopen news, see Stocks to Watch, now published separately.