This column was originally published on RealMoney on Oct. 5 at 1:59 p.m. EDT. It's being republished as a bonus for TheStreet.com readers.

There has been a sudden weakening of the stock market over the past few days. It appears to be related to worries about interest rates, which have escalated over the past week following numerous warnings from Federal Reserve officials about the likelihood of continued rate increases. This is apparent in the behavior of various sectors of the stock market and other asset classes.

Also contributing to the slide was Wednesday's release of the Institute for Supply Management's monthly index for the nonmanufacturing sector. The index, which was much weaker than expected, suggests that the recent signs of resilience in the economy were largely confined to manufacturing -- an unfavorable mix because of its implications for continued job growth and the chances for a sustained expansion (more on this later).

Homebuilders Weak

Evidence that Wednesday's stock market weakness relates at least partly to concerns about interest rates can be found in the slide in homebuilders' shares. Pressures are coming to bear on the sector for the many reasons I pointed out a few days ago . These include the Fed's continued rate hikes and the pressure the Fed is putting on bankers to tighten lending standards.

Other factors hurting housing include the 14-year low in housing affordability; slowing price gains and reports of price declines (this is reducing speculative activity); surging inventories; weakened consumer confidence; and rising assessed values (which raise the cost of ownership via higher real estate taxes and insurance costs). Weakness in housing could have a large impact on the economy.

Loss of Leadership

In addition to the weakness in homebuilders' shares, the two-day decline in oil and oil services stocks has left investors with scant leadership. Given the lack of confidence in other sectors, liquidations of shares in these leading groups leaves the overall market weaker, as there is no rotation occurring.

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