Early Look: Commodity Stocks Under Pressure Again

Commodity stocks are under heavy selling pressure yet again. The declines here have been shocking in that these stocks seem to have gone straight down without a bounce. That's not the way it usually works.

There are some signs that slowing growth in China is dampening demand for commodities, but I also think that hedge fund liquidations are also at work, possibly ahead of quarter-end (9/30) redemptions.

Financials are also lower this morning, being dragged down by Lehman Brothers (LEH), which is down a whopping -25% right now after news that the Korea Bank may no longer be in talks to acquire the firm. There is also chatter that if LEH sells it investment management business, the parts of the company that are left aren't worth very much.

Pending home sales for July fell -3.2%, more than forecast. This is causing some selling in the housing stocks, which have enjoyed a nice bounce since mid-July.

Tech stocks are holding up well this morning. CEO Michael Dell bought $100 million of DELL stock, which helped the tech sector before the market opened.

Asian stocks were lower overnight on concerns about slowing China growth. The dollar is higher again, adding pressure to commodity stocks. Oil is lower again, nearing $104. And the 10-year yield is lower at 3.63%, after Treasury bonds rallied late in the day yesterday.