At 12:15 p.m. EDT




) -- We all know September is historically a challenging month for equities, but it doesn't make Tuesday's rapid drop on the

Dow Jones Industrial Average

any less surprising.

After the best August in nine years, the Dow started the new month out on the wrong foot for bulls, dropping 175 points to 9321. The market held steady until 11 a.m. EDT, when equities fell off a cliff. Whether we were due for a pullback or not, Tuesday's slide seemingly came out of nowhere.

This could be a typical "

sell the news

" scenario, only exaggerated considering the recent run-up we've seen. For the most part, the day's economic news was mostly positive. The Institute for Supply Management said its manufacturing index increased to 52.9, which indicates expansion (rather than contraction) in the manufacturing sector.

The day's housing data was also rosy, with the National Association of Realtors' pending home sales index rising 3.2% to 97.6 in July, the sixth straight month of increases and the highest level in more than two years.

However, financial stocks were dragging the blue-chip average lower.

American Express

(AXP) - Get Report

slid 4.7%,

Bank of America

(BAC) - Get Report

dropped 4.4%,

JPMorgan Chase

(JPM) - Get Report

lost 2.8%, and

Travelers Companies

(TRV) - Get Report

was down 1.6%.

Among other notable decliners,

General Electric

(GE) - Get Report



(AA) - Get Report

dropped 3.9% and 3.5%, respectively. Only


(WMT) - Get Report

traded higher on the Dow, tacking on 0.1%.

Some perspective may be needed, though. Losing nearly 2% on the first day of what is usually the worst month for stocks is certainly bad, but we have to consider that the major U.S. averages have been on a steady climb higher since March, touching the highs of 2009 just last week.



concerning is the recent volume trend. During Monday's losing session, total volume on the

New York Stock Exchange

and the


ticked higher. Unfortunately, advancing volume fell while declining volume increased. Decliners are certainly outnumbering advancers today on both the NYSE and the Nasdaq.

Paul Nolte, director of investments with Hinsdale Associates, said that when looking at trailing five-day volume on Aug. 24, advancing volume was three times higher than declining volume. Since then, though, that difference has evened out, which he says could be the start of a reversal.

"The fact we're not getting follow-through is a bit of a concern," Nolte said. "The argument could be that investors are coming in at the top, potentially pushing the market to a final peak. This is a short-term indicator, but this time you have to wonder if this is the beginning of a new trend after a volume spike and market failure."

-- Written by Robert Holmes in New York