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Wednesday Market Note: How Will the Quarter End?

Yesterday was a pretty rough one for investors, as news out of China and from U.S. consumers renewed fears of a global slowdown. The Dow fell 268 points to 9,870; the Nasdaq Composite dropped 3.8 percent to 2,135; and the S&P 500 declined 3.1 percent to 1,041, its lowest close this year. The S&P 500 is now down over 14 percent from its April high. Stocks head into the last trading session of the quarter facing their first quarterly loss since Q1 2009.

Yesterday's selling started early, after a report showed slowing growth in China. The Conference Board said its leading economic index for China rose 0.3 percent in April, far less than the 1.7 percent reported recently. Chinese stocks fell 4.3 percent before the U.S. markets opened.

After rising for three consecutive months US Consumer Confidence plunged to 52.9 from 62.7 in May. Consumers continue to worry about the weak job market.

Completing the trifecta of bad news, European banks need to repay about $540 billion in loans to the ECB this week, shining a light on which institutions are still weak.

Today is looking a little brighter, at least early on. Asian shares closed lower, but after those markets closed, there was positive news from across the pond. European banks borrowed less than anticipated this morning, providing some relief to investors. US stock futures are pointing higher.

There was news out of the housing sector: RealtyTrac said that foreclosure sales accounted for nearly 1/3 of all home sales in the first quarter. The report noted that "total foreclosure sales in 2009 were up more than 1,100 percent from 2006 and up more than 2,500 percent from 2005."

Separately, by a vote of 409-5, the House voted to extend the closing deadline of the first time homebuyer credit. The vote doesn't allow for new entrants into the program--to qualify, the purchase and sale agreement had to be signed by April 30. However, the program had said that the transaction must close by June 30 to receive the credit. Lawmakers voted to extend the closing deadline to Sept. 30. The Senate must now approve the measure.

Finally, the horse trading continues on financial reform. Congressional Democrats gave up on the $18 billion bank tax, which would have covered the costs of reform efforts. The concession is expected to clear the path for the bill's passage.