The stock market correction is starting to pick up a little speed. All of the major market averages are lower thanks to some disappointing economic data and a rash of analyst downgrades. Crude oil is also rolling over in spite of a drop in the U.S. dollar after OPEC lowered their demand forecast for oil by 1.6 million barrels per day.

Asian markets are bucking the trend with a gain today. The Japanese NIKKEI posted its fourth gain in a row with a 0.5% rise. The Bank of Japan announced they would keep interest rates unchanged. There is little fear of inflation as consumer and whole prices continue to sink in Japan. China delivered several economic data points today. Factory output, imports and exports, and retail sales all improved but not quite as strong as expected. It was only yesterday that Goldman Sachs raised their 2009 GDP forecast for China from 8.5% to 9.4%. Officially the Chinese government is projecting 8% growth. Today's report showed the country grew 7.9% in the second quarter compared to 6.1% in the first quarter. Imports rose 8.7% while exports in July jumped more than 10%. The Chinese Shanghai index rose 0.4% on the session. The Hong Kong Hang Seng rallied 0.69% and closed at a new 52-week high.

China was not the only country that saw an improvement in exports. Germany, one of the largest exporters in the world, recently announced that exports rose 7% from May to June. Britain also had some good news with a slight improvement in retail sales in July but analyst point out that year over year comparables were easy since July 2008 was so bad. Meanwhile home prices in Britain remain weak with the latest data showing a 10.7% drop in price from a year ago. A quick glance at the major European markets and you'll see the early morning rally reversed and stocks turned negative by lunchtime. The English FTSE lost 1.08%. The French CAC-40 gave up 1.38%. The German DAX lost 2.4%.

Here at home the latest economic reports were a little disappointing. The Commerce Department said corporations have continued to cut inventories. The Wholesale Inventory report fell 1.7% in June. Economists were only expecting a 0.9% decline. This marks the 10th month in a row that wholesale inventories have declined and the largest stretch of declines since records began back in 1992. There is a big belief that across the nation inventories are so low and that the inventory restocking phase will kick the economy back into high gear. Today's report suggests the restocking phase hasn't started yet.

Another indicator the Federal Reserve likes to watch is the U.S. unit labor costs. This indicator fell 5.8%, posting the biggest drop since the middle of 2000. At the same time productivity gains soared 6.4% compared to economists' estimates of 5.3%. Speaking of the Federal Reserve the FOMC begins their two-day meeting today. While no one expects the Fed to change interest rates tomorrow they were will be a lot of focus on their comments regarding the economic landscape. Tomorrow we will also hear from the Bank of England on their latest measure of inflation.

Some of the worst performers today are the financial stocks. That's because Richard Bove of Rochdale Securities essentially downgraded the whole sector. Bove believes that investors should take profits now since earnings for the banking sector are unlikely to improve much in the third and fourth quarters. The BKX and BIX banking indices are down 4.1% and 4.4% respectively. The XLF financial sector SPDR is down 3.1%. There were several analyst downgrades today with Yum Brands, Sprint Nextel, and MBIA a few of the larger names being downgraded.

Another stock making headlines today is CIT Group Inc. (CIT). You may recall a few weeks ago the big story was a possible bankruptcy as CIT struggled with liquidity due to rising losses and lack of credit. There was a lot of buzz about how the federal government was not going to help even though they had already loaned billions in TARP funds to CIT. The company is the major lender for tens of thousands of small businesses and if they go under it would take a huge toll on the economy. During the company's meltdown in July it seemed like CIT had avoided the abyss by securing $3 billion in emergency funding from its bondholders. Yet today the stock is off another 19% at $1.20 per share after the company said it is still in jeopardy of going under.

In other news Government Motors... sorry, I mean General Motors (GM) made some stunning announcements about its new Volt electric car. The Cheverolet Volt won't hit showrooms until 2010 but current estimates are suggesting the car will get 230 miles per gallon making it the first mass-production car to ever get more than 100 MPGs. Mass production may be a little generous. GM is only making about 10 per week and the car will cost about $40,000. The closest competition in the hybrid market is the Toyota Prius that delivers 48 miles per gallon. The Volt starts with an electric motor and battery giving it a 40-mile range and then a small internal combustion engine powers up for a maximum range of 300 miles. News reports are stating that the Volt will only cost 40 cents a day to charge up from a regular home power outlet. Commentators on CNBC were claiming it comes out to around 3 cents per mile.

Currently the S&P 500 index is off almost 12 points near 995. A close here would be a breakdown under its 10-dma. The NASDAQ composite is off 24 points near 1968. The Dow Industrials are down 82 points near 9255. The small cap Russell 2000 index is down almost 10 points at 562.

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:

Reviewing the put plays I see that the oversold bounce in GENZ has stalled at its 10-dma. The ICE is down about 3% and testing support near $90.00. The QLD is down 2.3% and hitting new two-week lows. WYNN is off another 2.7% following yesterday's failed rally.