Stocks rebounded from their morning lows but bulls have run out of gas and the market is back at its lows for the session. News that Standard & Poor's had cut their outlook on the country of Spain to negative helped set a cautious tone. Earlier the dollar was edging lower and normally a weaker dollar is bullish for commodities but not today. Both oil and gold are down on the session. Meanwhile the Commerce Department said wholesale inventories improved.

Asian markets saw the selling pressure increase. The Japanese NIKKEI fell 1.3% and closed under the 10,000 level on a rising yen. The Hong Kong Hang Seng index posted its fourth loss in a row with a 1.4% decline. The Chinese Shanghai index fell 1.7%. In Europe the trend is down but selling pressure seemed to slow following yesterday's decline. Investors were nervous after S&P adjusted their outlook on Spain to negative and said the country was at risk for a downgrade. This follows yesterday's news that Fitch downgraded the country of Greece. Greek banks have been plunging on the news with a 5.8% drop today. The Greek banking index is off 38% in the last six weeks.

Another big story in Europe today was news that Britain's Treasury chief, Alistair Darling, has announced a one-time 50% tax on 2009 bonus worth more than 25,000 pounds (about $40,000). The bank paying the bonus would be subject to the tax and not the individual worker receiving the bonus. Many felt this was purely political spin playing toward public outrage over the bank bailouts and banker compensation. England faces an election in June. The English FTSE index fell 0.37%. The German DAX is down 0.72%. The French CAC-40 closed down 0.74%.

One of the big stories here at home was news on the Troubled Asset Relief Program (TARP). Midday President Obama said they were winding down the TARP since the program had done what it set out to do and the money would now be used to "pay down the deficit". This seemed somewhat contradictory to what U.S. Treasury Secretary Tim Geithner said this morning. The TARP program was set to expire this year but Geithner said it was being extended to October 2010. A few Republicans had some harsh comments on the TARP's extension calling it a "revolving bailout fund to advance the Democrat's political, social, and economic agenda."

This morning the Commerce Department reported the wholesale inventory and sales figures for October. After a record-breaking 13-month decline in wholesale inventories October's inventory numbers rose 0.3%. Economists had been expecting a 0.5% decline. Many analysts believe that business inventories are so low that when corporations finally decide to start restocking their shelves it will produce a big bounce to GDP. This bounce in inventory numbers is the first sign that might be happening. Wholesale sales rose 1.2% in October, which was better than the 0.7% estimate.

As I said earlier a weaker dollar is normally bullish for commodities but crude oil and gold have continued to sink. Oil is off 2.3% and trading under $71.00 a barrel following the weekly inventory report. Oil inventories were actually down, which is bullish for prices but gasoline inventories were sharply higher thanks to lackluster demand. Meanwhile gold futures were off almost $12 near $1,132 an ounce. Oddly enough the gold miners were bouncing this morning. Yet in the last hour this situation has reversed. The dollar is back in positive territory and the gold miners have turned negative.

Currently the S&P 500 index is off less than four points near 1088. The index should find support in the 1085-1080 zone in addition to support at its rising 50-dma.

Chart of the S&P 500:

Chart of the NASDAQ:

Chart of the Dow Industrials:

Chart of the Russell 2000 index:

A quick scan of the OptionInvestor.com play list reveals CPLA is showing some relative strength. FDX is seeing some profit taking after hitting new highs yesterday. The profit taking in PCP continues but shares are off their lows of the session. Yesterday's bounce in GMCR is reversing. Meanwhile shares of GS are trying to bounce from the $161 level.