The market sell-off is accelerating. Stocks are down for the third day in a row. The S&P 500 index is testing round-number support at the 1,000 mark. Pending home sales and the ISM data came in better than expected but it appears the news was already baked in or we're just seeing a "sell the news" reaction as nervous investors peer into September. Construction spending was slightly weaker than expected. Global markets were mixed while a rising U.S. dollar is putting pressure on commodities.

Asian markets were bouncing after a rough Monday. The Chinese Shanghai index turned in a volatile session with an intraday range of 3% before finally settling with a 0.6% gain. Yesterday the Shanghai was down 6.7%. The Hong Kong Hang Seng rallied 0.75% on Tuesday. Investors were digesting news that the official Chinese PMI index rose from 53.3 in July to 54.0 in August. This was a 16-month high and the sixth month in a row it was above 50. Readings above 50 indicate an expanding economy. Meanwhile the Japanese NIKKEI gained 0.3% and extended its streak of alternating up and down days to twelve.

Stocks in Europe were a lot weaker. There was an initial pop higher on Tuesday morning that quickly evaporated. The markets were underwater most of the session. All the major averages rebounded back toward unchanged when the U.S. released better than expected economic data but the rally failed and stocks plunged to new lows for the day. The English FTSE lost 1.8%. The French CAC-40 gave up 1.9%. The German DAX fell 2.5%.

Economists were expecting the U.S. ISM manufacturing index to rise from 48.9 in July to 50.5 in August. The Institute for Supply Management announced that August's numbers came in at 52.9. Readings over 50 represent a growing economy and 52.9 was the best reading since June 2007. The new orders component surged to 64.9, the best level since December 2004.

Pending home sales also came in better than expected. The National Association of Realtors (NAR) announced that the seasonally adjusted index of signed sales contracts jumped 3.2% in July to 97.6. Analysts were predicting a rise to 96.5. July's signed contracts represent a rally of 12% over last year's levels and the sixth monthly increase in a row. The improvement was driven by a big jump of impending sales for the west coast and improvement in the southern part of the country. Pending sales were still falling in the Northeast and Midwest.

The Commerce Department also released the July construction spending numbers. Economists were expecting this report to come in unchanged (0.0%) following June's 0.1% gain. The government said spending fell 0.2% in July as nonresidential building declines offset any gains in residential construction.

The U.S. dollar is rising and that's putting pressure on the commodity space. Gold's decline is pretty mild but copper, grains and oil are seeing stronger selling pressure. The worst sectors today appear to be the airlines, the banks, broker-dealers, the insurance sector and gambling sector. All of these industries are down more than 4% this afternoon. Not one sector index is in positive territory. The UTY utilities index is down the least with a 0.5% decline.

Currently the S&P 500 index is off about 21 points at 999 as it tests the psychological 1,000 mark. The NASDAQ composite is down 2% or 40 points at 1968. The Dow Industrials are down 185 points as selling accelerates with the index near 9310. The small cap Russell 2000 index is off 2.3% near 558.

Let's take a quick look at charts for the major averages:

Chart of the S&P 500:

Chart of the NASDAQ:

Chart of the Dow Industrials:

Chart of the Russell 2000 index:

Scanning the OptionInvestor.com play list for big movers today I see that AAPL has failed at the $170 level and is now testing its 30-dma with a 1.7% decline. ATI is now breaking down under the $30.00 level with a 3.6% decline. The volatile shares of FLS are down 3.5% and have hit our stop loss at $84.75. GWR is down more than 3% testing support near $30.00. GWW has hit our dip entry point at $86.00. IDXX has hit our stop at $49.75. Shares of LM are getting hammered with a 5% decline. The broker-dealers are really under performing. NEU is testing support near $80.00 and hit our trigger at $80.50. VMI is also testing support near $80.00 and almost hit our stop loss at $79.45. Our put play on FSLR is looking good with the stock down another 4.4% near $116. Our second and final target for FSLR is the $111.00 level.