By Greg Peel

The Dow closed down 81 points, or 0.6%, while the S&P lost 0.7% to 1541 and the Nasdaq dropped 1.2%.

A bit over half a year ago, all Wall Street could talk about was Apple. Still riding off the back of the success of the iPad, Apple shares pushed up to US$700 to surpass Exxon in market cap and become the biggest company in the US. Each day's move in the S&P 500 depended heavily on the move in Apple. Then out came the iPhone5, and it underwhelmed.

Last night Apple traded under US$400, to mark a 43% fall from September. The company is yet to report quarterly earnings, but anticipation is for a soft outlook. Combined with the reality of the slow death of the PC, Apple has helped to send the Nasdaq tumbling this week, which has dragged down the S&P.

Last night eBay and major insurer United Health posted disappointing results. Morgan Stanley missed on revenue, and fell 5%. Verizon (Dow) posted a lonely beat. After the bell, IBM (Dow) missed on revenue, and is down 3.5% in the after-market, Microsoft (Dow) missed on revenue but beat on earnings, and is up 2%, and Google posted a largely in-line result. At best, last night's results were "mixed".

The Conference Board leading economic index fell 0.1% in March to mark the first fall in seven months. January and February both showed 0.5% increases. The Philadelphia Fed manufacturing index fell to 1.3 from 2.0 in March. Weekly new jobless claims were slightly higher.

The good news is that commodity prices stopped falling last night. Yesterday's carnage on the local bourse began with further falls in commodity prices and the weak lead from Wall Street. The selling accelerated in the afternoon after a surprise warning from China's own government auditor that China's provincial and local governments are running up far too much debt on the back of Beijing's stimulus, and another tick up in Chinese property prices in March despite Beijing's efforts to cool the property market.

Now, if we had to point to the two most oft cited reasons over the past two to three years as to why China might be headed for a "hard landing" they would be a provincial and local government debt bubble and a property bubble. Stark warnings have been posted over this period by foreign economists, yet at worst the Chinese economy has merely slowed down its growth rate towards Beijing's official targets. Does this mean (a) it's all a storm in a tea cup, as Beijing has proven all this time it can manage the situation, or (b) those foreign economists are right but we are yet to see the bubbles truly burst?

There are plenty of economists who would argue (a) rather than (b), but yesterday was not the day to think about it on Bridge Street. Yesterday was an OMG get me out day. Yet while the big miners led the index down, the good old defensives and high yielders suffered only mildly. The Australian market is adjusting to the fact commodity prices are not going up forever. The pace of China's growth has plateaued. The next step is for mining costs to start falling to restore margins.

The buyers were back in on the LME last night, affecting mostly half to one percent metal price rises. Copper rose half a percent. They also decided it was time to buy oil after the steep fall this week, sending Brent up US$2.08 to US$99.81/bbl and West Texas up US$1.58 to US$88.26/bbl. Spot iron ore did its own thing as usual and fell US70c to US$138.60/t.

Gold jumped US$16.40 to US$1389.30/oz as the US dollar weakened slightly to 82.57 on its index. The Aussie, unfortunately, is unchanged around US$1.03. On the strength of commodity price falls this year, we should be down to 90 or lower, thus providing relief for the economy. But not while the global carry trade is targeting the world's safest high yield destination.

If consolidation in commodity prices is going to bring in the bargain hunters on Bridge Street today, that's not the suggestion of the SPI Overnight. It's down 12 points, or 0.2%.

There was definitely some buying going on in New York last night. The Dow was down by over 120 points at its nadir before bouncing to be down only 60-odd just before the death. As I flagged yesterday, the extent of any pullback is all a matter of just how long impatient bargain hunters on Wall Street can keep their cool. One thing's for sure ? the Fed will not be backing off anytime soon if US data continue to soften.

The earnings season will roll on next week, after tonight's biggie ? General Electric.

Locally, look out for quarterly reports from Santos ((STO)) and Lynas ((LYC)) today.