Market Update; worries around Spanish banks; worries about labor unrest in Europe

· Market Update – stocks for sale heading into the afternoon, failing to break up above the 200day MA (which stands at 1104).  It’s tough to read too much into the tape action given the holiday-impacted attendance/volumes (keep in mind that while stocks have a full day, the bond market closes at 2pm today; Mon is a holiday in the US and UK).  Fundamentally, some of the items being cited for the weakness: 1) saber rattling in NK (a general there has warned of “all out war”); 2) worries about labor unrest in Europe (there is a labor march scheduled for Sat in Portugal and Greece unions this morning talked about coordinating Europe-wide strikes); 3) the Fed setting dates for its term deposit facilities (see below for more); 4) worries around Spanish banks heading into the weekend amid reports that a few local institutions were in merger talks sand hoping to have something wrapped up by May 31 (recall the Spanish gov’t was forced to seize an institution after merger talks fell apart); 5) Spain cutting its eco growth outlook and raising its unemployment forecasts; 6) sluggish eco #s (Chicago PMI and personal spending in particular); 7) disappointment that the BP “top kill” wasn’t an immediate success (contrary to press reports yesterday) – a lot of the GOM-related energy firms are leading the sp500 on the downside (HAL, BHI, APC, etc).