As far as I can figure out the selloff was largely due to the PIMCO announcement.
The markets have been supported by the Feds 'QE2', which monitisation have been going into propping up the stock markets etc. PIMCO is an 'insider', the market is reacting to the assumption that they know something we don't and the assumption seems to be that Qe2 is ending, i.e the props supporting the markets are about to be removed. At least that is some of the speculation from zerohedge.
Markets are wary of another 2008 mass liquidation event, hence the selling.
