Global Stocks, ETFs Flash Warnings

In a relatively slow day of trading yesterday, major U.S. and global stocks and ETFs flash warning signals on both technical and fundamental levels.

On the fundamental level, China spooked investors by lowering its growth rate target to 7.5% from 8% and Europe continued making news with the deadline approaching for the Greek bond swap later this week.  A European purchasing managers index dropped to 49.3 from 50.4 for January, missing estimates and below the 50 level that separates growth from contraction, and so this data point confirms Europe’s slow slide into recession.

At home, the ISM services sector gauge improved to 57.3% for February, beating expectations, however, the employment index slipped, and most problematic for advocates of more quantitative easing, the price index jumped to 68.4% from 63.5%, indicating an underlying inflation push coming back into the economy.

Further economic slowing at home was evidenced by January Factory Orders  declining 1% compared to the previous month’s expansion of 1.4%.

But the big news of the day was Apple Computer (AAPL) and the Nasdaq 100 as Apple shed 2.2% and the Nasdaq 100 dropped 1% from extremely overbought levels.

On the technical front, the Nasdaq broke down hard, while other major indexes waffled sideways, unable to break through resistance to higher levels and remaining at extremely overbought levels. The break in the Nasdaq follows the Russell 2000′s even more significant drop on March 2nd, so now we have two market leading indexes flashing weakness.

ETF Summary:

SPDR S&P 500 Trust (NYSEARCA:SPY) -0.4%, unable to breach resistance at the 1370 level and continuing its drift in this long sideways channel.

Russell 2000 Index ETF (NYSEARCA:IWM) up 0.1% to consolidate after recent sharp declines.

Nasdaq 100 (NYSEARCA:QQQ) down 1% on weakness in Apple, Google (GOOG) and Hewlett Packard (HPQ).

Vanguard MSCI Europe ETF (NYSEARCA:VGK) down -0.4% on concerns over the ongoing European slowdown and Greek’s debt deal this week.

Dow Jones Industrial Average (NYSEARCA:DIA) down -0.1% after recovering from early losses but still unable to hold the psychologically and technically important 13,000 level with today’s close at 12,962.

Bottom line: Global markets remain in a perilous place, at significant technical resistance levels and with increasing headwinds on a fundamental basis.