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The S&P 500 is down 3.3 percent from it's Friday highs, which was the closing high for the year.
The most important factor is changing sentiment: it involves a changing consensus of the way traders look at events.
Examples:
a) China: rather than play commodities on the China stimulus, traders are now openly wondering how much stimulus the Chinese consumer can handle; what's the use of oceans of aluminum and copper sitting in warehouses if no one consumes it?
b) Retail: judging by Best Buy [ BBY 40.10 
+0.63 (+1.60%) ] (down 7 percent today despite beating earnings expectations), traders are now putting a greater emphasis on sales trends (not great) versus earnings (bettter due to cost cuts).
Two other factors in the decline this week:
a) The leadership got narrower and narrower, at the end it was only commodity and a few tech stocks moving forward; when the dollar and Treasuries showed even modest strength, that leadership also fell apart;
b) Regulation of financial services, and healthcare reform are weighing on both of those sectors.
So does this mean that we move down through the summer? The bears have been arguing this for months: that the consumer lacks the ability to significantly lift the economy, that a bottom should not be mistaken for a recovery, and that several quarters of below-par GDP growth are coming.
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