Market Update – stocks weakened pretty much since the open as investors sold into the strength of Sat’s China yuan-induced rally.  There was some fast-money buying this morning but the inability of the market to sustain upside momentum turned those buyers quickly into sellers.  The desk noted that there was never a lot of “real” long-only buying at the open and in fact people came in and used the strength as an opportunity to take profits.  The China announcement received a lot of favorable press over the weekend and this morning, but in reality the statement was very vague and the yuan/dollar fixing was left unchanged this morning.  Metals/mining stocks saw the largest gains of the day and stayed green into the bell (although came off their best levels) but most other major groups quickly lost steam.  On the fundamental front, there were a few small items of note today, but nothing that would really prompt a broad sell-off.  In European financials, S&P made neg. comments about Spain’s banking system and said it was now forecasting larger aggregate loan losses for the country (this morning) while Fitch downgraded BNP mid-day.  Tech, which was the best performing group last week, saw some of the heaviest selling of the large s&p sub-sectors today (GOOG, YHOO, WDC, JNPR, etc, all very weak) ahead of a busy week of earnings (ADBE/RHT/JBL Tues, ORCL/ACN/RIMM on Thurs).  On the financial regulatory front, the news today was actually on the positive front, as B Frank released a compromise statement on Durbin/interchange fees that appeared to soften somewhat the original language (this helped give a boost to the likes of V and MA).  On the consumer front this morning, CPKI came out and trimmed its outlook (the news hit the shares of DRI, which was among the weakest stocks in the whole SP500).  Consumer-discretionary stocks in general weighed hard on the market (in addition to DRI, names like SVU, M, BBBY, AMZN were all among the top 10 weakest stocks in the S&P).  Bigger picture, there is a concern that corporate margins may be “as good as they get” and could compress going forward (this was talked about in Barron’s over the weekend and has received press elsewhere as China wages/manufacturing costs head higher; the stronger yuan could hurt US companies that rely on purchasing goods for re-sale from the country; a Bloomberg article today emphasized the point: “profit-margin outlook for US is “extremely bad”).  Bottom Line – the China news enthused the press more than it did investors and the rally was never embraced and instead brought out selling.  The 200day MA once again proved key (we bounced off it again – 1110.7).  The trends of the last two weeks remain in place for the most part – there isn’t a lot of heavy selling taking place but buyers are very reluctant to chase the market higher