1:35 pm : The major averages hover near their recent levels with the S&P 500 leading to the downside (-0.6%). The Dow and Nasdaq trade ahead of the benchmark average, but the two indices have returned into the red after making a brief appearance in positive territory.

Cyclical sectors continue to pressure the broader market with financials down 1.0%.

Notably, gold futures have strengthened. The yellow metal trades higher by 1.8% at $1392.50.DJ30 -38.27 NASDAQ -12.52 SP500 -9.07 NASDAQ Adv/Vol/Dec 1040/1.08 bln/1411 NYSE Adv/Vol/Dec 884/409.7 mln/2103

1:00 pm : The S&P 500 trades lower by 0.3% after being down as much as 1.2% during the opening minutes.

Stocks opened sharply lower as the 7.3% plunge in the Nikkei contributed to the early selling. In addition, China's first contractionary reading of the HSBC Flash Manufacturing PMI in seven months (49.6 actual, 50.5 consensus, 50.4 prior) reminded investors of the persisting growth concerns.

The initial weakness caused an early slump in all ten sectors before the subsequent rebound helped most groups reclaim a portion of their losses. At midday, the utilities sector is the only group trading with a loss larger than 1.0%.

On the flip side, the rebound in technology has run the growth-oriented sector back to its unchanged line. Major components like Apple (AAPL 443.25, +1.90), Cisco Systems (CSCO 23.51, +0.17), and IBM (IBM 207.90, +0.91) all trade with gains between 0.4% and 0.7%. In addition, Hewlett-Packard (HPQ 24.12, +2.88) has jumped 13.6% after its upside guidance and dividend hike overshadowed the company's mixed earnings report.

The materials sector is the