Stock Market Update

[BRIEFING.COM] A positive start to the session has evolved into a trend-down day for the major indices, which are at, or near, their lows for the day heading into the final hour of trading.

The small-cap Russell 2000 (-3.6%) is the biggest loser, giving back a decent-sized portion of the 10.1% gain it registered in July.

Today's losses are rooted in growth concerns that were piqued by a batch of disappointing economic data this morning that included an ISM Manufacturing Index for July that fell deeper into contraction territory. That report took the opening steam out of the stock market and transferred it to the Treasury market, which is settling today's session near its best levels in terms of price and lows in term of yield.

The 2-yr note yield is down 16 basis points from yesterday's settlement to 4.18% and the 10-yr note yield is down 13 basis points from yesterday's settlement to 3.98% (the first foray below 4.00% since February).

The drop in yields has fostered some relative strength in the rate-sensitive utilities (+1.4%) and real estate (+0.6%) sectors; however, regional banks are decidedly weak as the growth concerns are fueling some worries about credit quality and catalyzing some selling interest after a huge 27% gain in the SPDR S&P Regional Banking ETF (KRE 55.47, -2.81, -4.8%) from its low in mid-June.