Stocks set to fall from record highs

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Equities are lower today as investors take profits at long-term highs.

S&P 500 futures are down fractionally, while most European indexes are declining by more than half a percentage point. Asian markets were little-changed in the overnight session.

Stocks began the year with a strong rally, which brought the S&P 500 to a five-year high, while the Dow Jones Transport and Russell 2000 small-cap indexes both hit record levels. While most economic news in this month has been positive, the United States reported a surprise drop in gross domestic product yesterday and Germany's retail-sales report this morning was much weaker than expected.

Attention now focuses on initial jobless claims at 8:30 a.m. ET. China will also report manufacturing data this evening, which could affect energy and materials stocks. The headlines continue tomorrow with European manufacturing and the crucial U.S. monthly jobs report scheduled for before the opening bell.

Foreign-exchange markets are showing a modest pattern of risk aversion as the euro, Australian dollar, and Canadian dollar all decline slightly. The Japanese yen, often treated as a safe haven, is up across the board.

Commodity markets are painting a similar picture: Oil and copper, the most economically sensitive products, are both posting small losses. Precious metals and most agricultural foodstuffs are lower as well.

In company-specific news, JDS Uniphase is indicated to climb about 14 percent after its earnings and revenue beat expectations. Qualcomm is up about 6 percent after strong smart-phone demand resulted in strong profit and allowed management to raise guidance.

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