A couple of data releases on manufacturing show a more modest pace of growth than the earlier numbers would suggest.
Chicago Purchasing Managers Index
source: Bloomberg
September ISM Manufacturing Survey
source: Jefferies
There is no question that manufacturing continues to expand. But the risk of another dip is being priced in again. As "Cash for Clunkers" program ended, a more "normal" pace of growth returned. Coupled with an unexpected jump in the initial jobless claims, the new data has taken the equity and credit markets out of their euphoria mode for now.
Source: Bloomberg