I entered a house in Sims and as I moved around the lot I noticed a circle around my cursor outside the house. It was night time and there was snow on the ground. There was a dark circle, like a shadow, around the cursor wherever I moved. The cursor was flickering.
That's normal. there's an option to disable it somewhere in the graphics options - it's called "x-ray cursor," and it is actually useful if you need to find newspapers under the snow, or things like that.