US stocks have fallen in late morning trading today as investors worry that the near-term outlook is too grim to support the market after a two-month rally sparked by hopes for an economic rebound next year.
"The market felt it was getting a little too optimistic a little too quickly and there's recognition of the many, many risks in this environment," said Mr Milton Ezrati, of Lord Abbett & Co, a senior economic strategist.
"There's the war situation and the fact that although the economic situation has improved no one can declare us entirely out of the hole as far as economic weakness is concerned," he said.
The blue-chip Dow Jones industrial average lost 96.53 points, or 0.98 per cent, to 9,776.07 and the broader Standard & Poor's 500 Index was down 10.16 points, or 0.88 per cent, at 1,139.34.
Anecdotal evidence of the US economy's health - and potential further weakness - is expected later in the day when the Federal Reserve's beige book on regional economic activity is issued at 7 p.m.
In other news, Texas Instruments expects fourth-quarter revenues to be down about 10 per cent from the third quarter, and sees a fourth-quarter loss of about 9 cents per share.
In other major markets, European bourses struggled along near their intra day lows today as Wall Street fell for the second consecutive session. Tokyo's Nikkei average closed nearly three per cent lower amid profit-taking in high-tech issues including Canon.
"Just as we had rallied sharply and foreign markets rallied sharply, they are pulling back this morning and we are pulling back," said Prudential Securities analyst Larry Mr Wachtel.
"The market will probably go into a profit-taking phase for the next couple of days." Mr Wachtel added.