×

Rally After Down Day Or Continued Weakness?

Futures dropped 10 points as the unemployment rate rose .4 percent to 6.1 percent, the highest since September 2003. The S&P will likely open in the mid 1,225 range; the key number here is 1,200, which was the July 15th intraday low.

We have seen a weak rally from the July lows that is now deteriorating; Demand for stocks has been weak and supply has been more than adequate.

Yesterday was a 90 percent downside day on both the NYSE and the NASDAQ, according to Lowry; in the past these sharp down days typically are followed by rallies of 2-7 days before a renewed decline. However, there were important breaks of support yesterday, which Lowry says, suggests potential for further weakness.

Elsewhere:

1) Nokiadown 11 percent, lowering its third quarter 2008 mobile device market share on weaker consumer confidence; they now expect it to be lower than in the second quarter. Motorola and Texas Instruments weak in sympathy

2) Goldman downgrades Merrill Lynch to sell: "With these markets still under pressure, we believe additional write-downs...and book value deterioration will continue to plague the stock." Merrill down 5 percent.

3) Elan looking for second-round bids for its drug delivery unit, Elan Drug Technologies. It could fetch between $1.3 and $1.4 billion. A few private equity firm are in the bidding.

4) M&A chatter floating around:

a) Tobacco firm Altria in advanced talks to acquire smokeless tobacco maker UST, according to the New York Times; UST up 23 percent.

b) Samsung may make a bid for SanDisk,according to online news provider eDaily. That would create a flash memory powerhouse. A SanDisk spokesperson said that they periodically have conversations with multiple parties, including Samsung. One issue: SanDisk already has a venture with Toshiba.

_____________________________
New!

- Track The Dow 30 Now

_______________________________________

Questions? Comments? tradertalk@cnbc.com