S&P futures vs fair value: -12.7. Nasdaq futures vs fair value: -10.5.

Both the S&P 500 and Nasdaq 100 futures are off their morning lows but still trade well below value to indicate a lower start for stocks. While yesterday’s gains were solid, the fact that another day of below average volume left stocks susceptible to some late-day profit taking further underscores the lack of conviction behind recent buying efforts and the underlying angst among investors.

With regard to what is shaping up to be a dismal day for financial stocks, Citigroup (C), which reportedly owns about 25% of the market for SIVs, has cut estimates on two investment banks (e.g. LEH, MS), has left valuations in already beaten-down area even more vulnerable. Libor trading around 5.7%, the highest it's been above the fed funds target since the aftermath of the 9/11 terrorist attacks, is also acting as an early headwind for rate-sensitive areas like banks and brokers.