The HSBC China Purchasing Managers’ Index, geared to smaller firms, improved to 49.3 in April from 48.3 in March, but remained below the threshold of 50 that divides expansion from contraction. Still, it showed that the rate of deterioration had slowed following a difficult first quarter when economic growth hit its slowest pace in nearly three years.

By contrast, the government’s official manufacturing PMI, largely indicative of bigger firms, rose to a 13-month high of 53.3 in April, figures on Tuesday showed, thanks to stronger output. The March reading was 53.1.

“Anecdotal evidence provided by survey respondents suggested that reduced production reflected lower levels of incoming new business. There were also reports of a general deterioration in market conditions,” Markit Economics, which compiled the HSBC index, wrote in its report.

The China Federation of Logistics and Purchasing, which compiles the official index, also urged caution on Tuesday.

“Influenced by the change in demand, there is the possibility of a waning in future economic growth,” one of the federation’s analysts, Zhang Liqun, said.

The federation noted that while its sub-index for large firms was at 53.7 in April, or firmly in growth territory, its smaller firms sub-index was below the growth threshold, at 49.1.

The dichotomy represents the continuing struggle for financing by smaller firms that find it more difficult than state-owned firms to get loans and other support. Chinese manufacturers must also contend with the pressures of too much capacity and lackluster demand.

“The longer the two indicators straddle either side of the 50-line, … the less useful they become as indicators at all,” wrote Alastair Thornton of IHS Global Insight in Beijing.

Both surveys agreed that new export orders rose, albeit marginally, in April, while overall new orders fell, implying that domestic demand was relatively weak.

HSBC said some respondents were cutting prices to “stimulate fragile demand.”

That backs up comments made by the chief executive of Caterpillar CAT  102.11 -0.66, the world’s largest maker of construction machinery. He said the company was trying to work with dealers after sales fell sharply in the first quarter.

While input costs rose, albeit moderately, factory gate prices were unchanged in April, the HSBC survey found. That inability to pass on rising raw materials or labor costs is a sign of overcapacity.

The quantity of purchases sub-index ticked above the 50 mark for the first time since October 2011, HSBC said, although it noted that subdued demand reined in buying.

Almost four-fifths of the HSBC survey respondents said export orders were unchanged.

Eurozone finance ministers sealed a deal Tuesday morning for a second bailout for Greece, including 130 billion euros ($173 billion) in new financing.
The finance ministers from the 17 nations that use the euro, known as the Eurogroup, gave Greece funding it needs to avoid a potential default next month.
While this new deal provides some short-term relief for Greece, difficult days lie ahead as the government tries to trim debt to 121% of the country’s gross domestic product by 2020. Greece’s debt now stands at about 160% of GDP.

The major averages rallied to begin the day, but then suddenly turned lower when the Conference Board’s measure of consumer confidence came in significantly below expectations. The S&P/Case-Shiller 20-city composite home price index also took a toll on stocks. The index showed that home prices dropped sharply in November declining for the third straight month.

The DJIA closed right in the middle of today’s trading range, down about 21 points or 0.16%. The Dow is trapped between levels of support and resistance and continues to trade sideways. The S&P500 Index also closed in the middle of today’s range with a minor loss.

Today’s best performing stocks among the S&P500 components just happen to display some very favorable patterns on their daily charts. CBRE Group (CBG) and Edwards Life Sciences (EW) with gains of about 5.70%. United States Steel Corp. (X) and Mattel Inc. (MAT) both closed up about 5%. Harris Corp. (HRS), up 4.57% and McKesson Corp. (MCK), up 3.85% round out the day’s biggest S&P gainers.

Some more details on the expected Facebook (NYSE: FB) IPO filing are leaking out.

According to reports from IFR, the social media giant is expected to raise just $5 billion in its preliminary IPO prospectus which is due Wednesday morning. This is lower than the $10 billion number that was being discussed.

IFR said the smaller deal size “reflects a decision to start with a conservative base before deciding whether to increase.”

As expected, Morgan Stanley (NYSE: MS) will lead the deal. Goldman Sachs (NYSE: GS), Bank of America Merrill Lynch (NYSE: BAC), Barclays Capital (NYSE: BCS) and JP Morgan (NYSE: JPM) will help with the underwriting.

The IPO process could be finalized by May, the report said.

A valuation wasn’t mentioned, only that recent trading on private exchanges pointed to a $80 billion-plus valuation.

A ticker also wasn’t mentioned, although recent reports suggest “FB” is the stock symbol.

Stockshakers are cautiously defensive here already due to the pending issues in the Eurozone.
Noticing the selling action today alone indications are early and this is based in theory but we may see some profit taking as many move to cash to get their powder dry for the Biggest IPO of our time.