Market Update

12:55 pm : The major indices continue to trade in negative territory, with the Dow slightly trailing the broader market.

Only five of the 30 components in the Dow Jones Industrial Average are currently showing gains, with Microsoft (MSFT 37.29, +0.48) providing leadership. Financial stocks are the largest drags on the Dow. Citigroup (C 38.70, -2.66), AIG (AIG 60.39, -2.73) and JPMorgan (JPM 45.06, -1.94) are the main laggards.DJ30 -206.55 NASDAQ -35.50 SP500 -22.12 NASDAQ Dec/Adv/Vol 1.27 bln/2298/625 NYSE Dec/Adv/Vol 2596/547/786 mln

12:30 pm : Since the last update, the stock markets recovered some losses, but the gains are modest compared to this session's range. The energy sector (+0.02%) has had a notable turnaround as it follows crude oil's recovery.

Crude has pared a good portion of its intraday losses, and is now down 0.4% to $94.12. On Sept. 11th, OPEC decided to increase production by 500,000 barrels a day, which officially took effect today. DJ30 -183.39 NASDAQ -31.55 SP500 -19.66 NASDAQ Dec/Adv/Vol 2280/615/1.15 bln NYSE Dec/Adv/Vol 2619/498/703 mln

12:00 pm : Following yesterday's Fed induced rally, the stock market opened with substantial losses, and has remained in the red throughout the session. The main catalysts for the profit taking have been Dow components Citigroup (C 38.60, -2.76) and Exxon Mobil (XOM 89.90, -2.09).

CIBC downgraded Citigroup to Sector Perform from Sector Outperform this morning. The downgrade, though, isn't the focal point for investors so much as the thesis behind the ratings change.

CIBC analyst Meredith Whitney believes that Citigroup will need to raise more than $30 billion in capital over the near-term through either asset sales, a dividend cut, a capital raise, or a combination thereof. Whitney adds that Citigroup's tangible capital ratio stands at just 2.8 percent versus an average of 5.0 percent for its peers.

Meanwhile, Exxon Mobil , the largest company in the world by market cap, reported its biggest drop in quarterly profits in more than three years. The company reported net income of $9.41 billion or $1.70 per share - four cents below estimates.

Economic data were slightly negative this morning. The core PCE deflator for September and the weekly initial jobless claims were in-line with expectations. The ISM Index , however, came up short of economists' forecasts.

All ten economic sectors are in the red. Some of the most influential sectors are underperforming which is acting as a major drag on the broader market. The financial (-3.7%), energy (-1.7%) and consumer discretionary (-1.8%), which combined make up roughly 41 percent of the S&P 500, are laggards.

The tech, healthcare and utilities sectors are outperforming on a relative basis, but are still posting losses around 0.7%

Crude oil hit an all-time high of $96.24 in electronic trading, but has since retreated and is now down 1.3% to $93.33. DJ30 -220.00 NASDAQ -36.65 SP500 -24.73 NASDAQ Dec/Adv/Vol 2282/568/999 mln NYSE Dec/Adv/Vol 2600/500/607 mln

11:30 am : The stock market has headed mostly sideways in the past half hour.

Shares of shoemaker Crocs (CROX 53.50. -21.40) are getting clipped. The company reported earnings that beat expectations by $0.03 per share, but missed on the top line and gave just in-line FY07 guidance. Investors are disappointed that Crocs did not beat by more, as it has in the past.DJ30 -182.09 NASDAQ -29.24 SP500 -20.65 NYSE Adv 449

11:00 am : The major indices are off their lows after making modest gains. Losses are still substantial, though.

At the NYSE, the overwhelming majority of stocks are currently in the red. The advancers to decliners ratio is a mere 0.13. Meanwhile, volume is heavier than it has been the past few days.

The small-cap Russell 2000 Index is underperforming the broader market.DJ30 -189.89 NASDAQ -30.0 R2K -2.2% SP500 -21.37 NASDAQ Dec/Adv/Vol 2224/528/683 mln NYSE Dec/Adv/Vol 2637/378/409 mln

10:30 am : Buyers are not showing much interest as the stock market extends its losses following a disappointing economic report.

Released at the bottom of the hour, the October ISM Index, a survey of national manufacturing activity, dropped to 50.9, from a prior reading of 52.0. The number was also lower than consensus estimate of 51.5. A number above 50 is intended to indicate growth.

Conversely, the bond market has had a pickup in buying interest as stocks slide.DJ30 -217.37 NASDAQ -35.22 SP500 -25.43 NASDAQ Dec/Adv/Vol 2249/429/464 mln NYSE Dec/Adv/Vol 2537/356/185 mln

10:00 am : The Dow and S&P have given up all of yesterday's gains and then some as the stock market has had a substantial decline in the early-going. All of the major indices are in the red due to broad-based selling pressure. The financial sector (-3.3%) is the main drag as Citigroup's (C 38.43, -2.95) stock plummets.

Although third quarter GDP was strong, economic growth will slow in the fourth quarter. The earnings outlook is mediocre. So, it is understandable that the market will sell-off some today after yesterday's big rally. Of course, that is not to say a recovery is not possible today.

Meanwhile, crude oil is now down 2.0% to $92.73 after hitting an all-time high of $96.24 in electronic trading.DJ30 -191.43 NASDAQ -31.15 SP500 -21.75 NASDAQ Dec/Adv/Vol 2077/410/199 mln NYSE Dec/Adv/Vol 1722/270/58 mln

09:40 am : The stock market opened decidedly lower. Yesterday, the stock market rallied following the FOMC decision to cut policy rates by 25 basis points.

There are a few profit taking catalysts this morning. A CIBC analyst downgraded Citigroup (C) and asserted that the company may be forced to cut its dividend or sell off assets to meet a $30 billion capital shortfall.

A report from RealtyTrac that U.S. foreclosure activity increased 30 percent in the third quarter from the previous quarter and nearly doubled from the year-ago period.

Earnings reports were mixed today. Dow component Exxon Mobil (XOM), which has the largest market cap in the world, is a drag on the market after the company reported worse than expected third quarter earnings.

Core PCE Inflation and weekly initial jobless claims were in-line with expectations. DJ30 -181.92 NASDAQ -36.74 SP500 -22.61

09:16 am : S&P futures vs fair value: -16.3. Nasdaq futures vs fair value: -17.3.

09:00 am : S&P futures vs fair value: -18.8. Nasdaq futures vs fair value: -20.3. Additional profit taking has pushed the futures market lower. Oil is now flat at $94.58 a barrel.

08:33 am : S&P futures vs fair value: -10.0. Nasdaq futures vs fair value: -9.5. Futures dipped following a worse than expected earnings report from Dow component Exxon Mobil (XOM). At 8:30 ET, futures then made a slight recovery immediately following the Core PCE Inflation reading of 0.2% and the weekly initial jobless claims reading of 327k. Economists were expected the Core PCE Inflation to be 0.2% and the weekly initial jobless claims to be 330K.

08:01 am : S&P futures vs fair value: -8.3. Nasdaq futures vs fair value: -6.5. Futures are pointing to a lower open, but losses are modest compared to yesterday’s rally following the 25 basis point rate cuts. Profit taking catalysts include rising oil prices, a CIBC assertion that the Citigroup (C) has a $30 billion capital shortfall, and a report from RealtyTrac that U.S. foreclosures increased in the third quarter by 30%. The majority of today’s earnings reports have beat estimates.

06:21 am : S&P futures vs fair value: -6.7. Nasdaq futures vs fair value: -5.5.

06:20 am : FTSE...6681.00...-40.60...-0.6%. DAX...7995.98...-23.14...-0.3%.

06:20 am : Nikkei...16870.40...+132.77...+0.8%. Hang Seng...31492.88...+140.30...+0.5%.