Today's growth being seen in Chicago Purchasing Managers was totally dwarfed by what is still an overbought US stock market. Another big drop in Shanghai and a drop in other major overseas stock markets sealed the fate today. The bears scored another win, but this is just a 'day-two' victory after literally eight or nine days of straight DJIA wins....

Here are today's unofficial closing bell levels:

Dow 9,498.93 -45.27 (-0.47%)
S&P 500 1,020.76 -8.17 (-0.79%)
Nasdaq 2,009.06 -19.71 (-0.97%)

Top Analyst Upgrades
Top Analyst Downgrades

Oil traders have been selling off the precious crude Monday, as a steep sell-off of China's benchmark index raised concerns over the current state of both the Chinese and U.S. economies.

The Chinese Shanghai Composite Index took a beating to start off the week, trading down 6.74%, and raised fresh concerns over a global economic rebound. Today's sell off in the Chinese market was its biggest decline since June of 2008. The sell-off comes on the heels of a near 3% drop in the index last Friday.

With the Shanghai index plunging 20.6% last week, some China small-cap stocks are now trading at attractive valuations. One of my favorites is China Green Agriculture (AMEX: CGA).

China Green Agriculture is fertilizer company based in Xian, China that has been on the rise. Shares are up 286% year-to-date as investors gobbled up the stock. The most recent financial results, released in May, showed a 99% increase in revenues, and a similarly impressive 133% increase in net income.

The hype around China is seductive, especially when we're mired in a recession. Any ray of hope is worth a few minutes of our time. Even a turning economy isn't enough ... it hasn't turned yet! So, we have the promise of China.

Well, China is about to learn about the downside of capitalism. A bear market could be threatening the country, driving home the notion that free markets (even if only slightly free) involve some risk, and proving to the American public that inside every sure thing is a hefty dose of "flavor of the month." The bears are circling Shanghai, even as the U.S. equity market appears to be coming back.

In the wake of Wall Street's recent tumble, several cities have started vying for New York's position as the center of worldwide finance. In Shanghai, for example, some investors have noted that, in spite of the city's relative inexperience in the world of high finance, it is swimming in cash. Tokyo, meanwhile, is working on rearranging its regulatory structure in an attempt to make its markets more attractive to international investors.

Perhaps the most interesting competitor for the throne of worldwide financial center is Dubai. Currently in the middle of a massive construction boom, the city has taken a variety of steps to make itself attractive to foreign workers, including relaxing Islamic law and creating so-called "free zones," where taxes are greatly reduced. On the other hand, Dubai has a mean humidity of over 60% and several months where the average temperatures top 100° F. Of course, if everything was based on climate, the worldwide financial center would probably be in the South of France!

While it's hard to imagine New York ceding its position at the heart of worldwide finance, the same could once have been said of Venice or London. The one constant in world history is that nothing lasts forever, and countries that fail to remain competitive do so at their peril. While we wait to see the future of New York, I'm going to try to imagine Jim Cramer in a keffiyah!

After days of losses mirroring U.S. markets, China-related plays soared and other Asian markets also got a lift in Wednesday trading. Japan's Nikkei 225 Average rose 0.2% to 13,052 . China's Shanghai Composite jumped 3.8% and the Hang Seng China Enterprises Index saw a spike of 4.5% to 11,797. The word was that the rally in Shanghai was caused by speculation of a possible ban of pension fund managers from leaving their jobs less than a month before the Beijing Olympics begin.

Benjamin Collett with Daiwa Securities told MarketWatch, "What's (also) providing support to the (Shanghai) market is that valuations [are] at crisis levels and the Chinese economy isn't."

With the DJIA rallying 152 points yesterday, for, the streak is set to continue again today, taking some foreign markets along with it.

Best Buy (NYSE: BBY) continues to aggressively look at China as its next retailing conquest, and the largest consumer electronics chain in the U.S. has just said that it plans on a second location in Shanghai to firmly cement its plans there.

The company stated that it still needs to find a suitable site, but if it does, another Shanghai store is in tow sometime in 2008. The retailer's existing Shanghai location -- in the downtown Xujiahui area -- opened in early 2007, and has already proved successful enough to make Best Buy's international development team seek another location. My, my -- that was quick!

Best Buy CEO Brad Anderson says that the retailer is studying China and is not making snap judgments in terms of its expansion strategy there, saying that, "Best Buy needs experience in the China market, but it takes time." The only problem is that the competition is becoming more fierce every day, with companies already familiar with doing business with Chinese consumers. The learning curve needs to accelerate in Best Buy's case or it could find itself behind.

It's very strategic for Best Buy to study the competitive landscape and brand itself as required in China's rapidly growing retail market, but in addition to that it needs to understand the needs of the Chinese consumer more than anything. That will take time and patience, but every quarter still counts here.

The Shanghai Composite rose 2.5% to 5,692.76, a record.

According to CNN Money, China Life gaining the 10 percent and Bank of China added 6.2 percent.

Shanghai is now up 113% for 2007.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Markets in Asia rose sharply.

The Nikkei was up over 2.6%. Canon (NYSE: CAJ) ralled 5.9%.

The Hong Kong Hang Seng rose almost 2.4%. China Mobile (NYSE:CHL) was up 3.9%.

The Shanghai Composite broke 5,000 for the first time.

Douglas A. McIntyre is a partner at 24/7 Wall St.

In a recent survey jointly conducted by The British Council and a China daily, 84% of young Chinese want to purchase a car (despite the fact that 80% of them are concerned with global warning).

General Motors Corporation (NYSE: GM) hopes to capitalize on that 84%. Shanghai General Motors' joint venture with Shanghai Automotive have announced the creation of interest-free car loans, as they fight for additional market share in the competitive Chinese market. In the first six months of 2007, General Motor brands have lagged in China behind the sales increases for passenger vehicles. Sales for Shanghai GM were up 12%, while overall car sales in China climbed 26%.

The "Buick Elite Wealth-Management Program," as its called, will try to lure buyers into financing in a nation where many prefer to buy cars with cash. GM officials said they were unaware of the initiative before it was announced to the Chinese media, the Wall Street Journal reported.

On tonight's MAD MONEY on CNBC, Jim Cramer dedicated the night to China. He's not gung ho on Chinese stocks, but he's willing to review some of them. (As a reminder, Cramer said he doesn't like investing in China, he doesn't trust China, and he thinks it is overvalued.) He has forecasted an imminent 8% to 10% pullback any time, because, he says, the market is overheated. After you get that pullback then you can buy the stocks, but he advises not to do so now.

As a reminder, Cramer said he wouldn't cross the river with his charitable trust to invest in China, even if there was a 20% pullback in the market. But Cramer does have some picks; he has three solid steady plays and two speculative stock picks.

The 'solid plays':

• CNOOC Limited (NYSE: CEO) is China's nationalized oil play, the number one offshore, a large player in Indonesia; it is 67% government-owned. Under the production sharing, the company gets the mandatory rights. As long as oil stays high this one is a winner, he thinks. ADR's have a $45 billion market cap; 3% dividend yield.
• China Mobile Limited (NYSE: CHL), says Cramer, is the winner in the Chinese wireless market with 68% of the mobile users in China. The government owns the majority of the company. It has been on hold because of rumors that China Telecom might enter wireless; it has 1.9% dividend; $191 billion market cap.

The S&P 500 closed today at 1530.23, a new all-time closing high. The S&P 500 had been flirting with a new high these past 10 days, but now it is done and official. So, what does all this signify? Where do we go from here?

The United States stock markets have proven to be resilient and strong so far in 2007. The first quarter saw general corporate earnings to be quite healthy and, even more important, sustainable for the remainder of the year. The market was knocked -- before it even opened -- this morning by the news out of China. The government of China, trying to cool off the wild ride its market has provided this year, introduced a higher transaction tax. The government raised the rate from 0.1% to 0.3%. The Chinese market took a hit, but appears ready to plow right back through the pre-tax announcement.

The US market, and the S&P 500 specifically, is not generally viewed as "expensive." With the S&P 500 trading at 16 times 2007 expected earnings, the consensus is the market is fairly priced -- not over-priced. Coupled with strong corporate earnings experienced the first quarter, investors are feeling and showing confidence in the US economy. After all the stock market is the voice of near term confidence -- or lack of it.

The private equity world is keeping investors interest at a peak. The game of "who is next " on the acquisition block is keeping stocks afloat, and almost any company under $50 billion in market capitalization could be "in play." The share buyback programs are actively in place with almost $150 billion committed during this second quarter. It's a strong vote of confidence by American corporations in the value and merits of their own stocks.

So, we see strong corporate earnings flow, private equity activity at fever pitch, active share buy-backs, net in-flows into equity mutual funds and relatively low interest rates ... the S&P 500 is reflecting all of these positive factors.

Georges Yared is the CIO of Yared Investment Research. For more growth ideas please visit the web site

Overnight, the Shanghai Composite fell almost 7%. Part of the reason is that the Chinese government is increasing the tax on stock trading to try to slow the overheated market.

The same index dropped 9% in one day last February. Markets around the world sold-off due to concerns that a collapse in the Chinese markets could hurt that economy and the ripple effect would hurt global growth.

But, that did not happen. Within a few days, the markets in China were moving up and made a number of new highs from April through late February.

The drop in the Shanghai market has a very different cause this time around. Increasing the tax on trading 3 times in one day is a pretty good incentive to cut down trading. Reuters quoted one analyst as saying: "In theory it shouldn't matter if Chinese stocks plunge, but markets are at high levels and investors are very aware of the downside risk."

But, the main reason for speculation, a hot Chinese economy, has not gone away. The price of trading is just a little higher, and that means that the market will probably keep going up.

Douglas A. McIntyre is a partner at 24/7 Wall St.

If anyone on Wall Street is up at this hour, they were probably holding their collective breath as the clock ticked toward the open of China's markets today. Would more losses come out of the East? Would the Dow enter a spiral, instead of a "correction"? And at the opening bell, the Shanghai Composite was, indeed, down. But soon the market rallied and, by the end of the trading day, a nice 3.94% gain had been registered for a close of 2881.07.

You can let out your breath, now. Well, maybe not entirely; though China is doing well for the moment, Japan's Nikkei 225 Index fell 2.85%, or 515.80 points, to close at 17,604.12. Markets throughout Asia, in fact, were down in amounts ranging from tiny (Sri Lanka) to severe (the Phillipines), but for Taiwan (up 0.02%) and China.

What would Europe do? Evidently, continue along the downward path. At the FTSE's market open, the index fell, and at 3:24 a.m. EST was already down 2.31%. Will the markets keep tumbling, each one in reaction to the other, like so many global dominoes? Or will the U.S. again follow China and bounce back? Either way, the Dow Jones Industrial Average is still awfully close to record territory; I think we have a few percentage points to fiddle with before I'm hitting any panic buttons.