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.
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.
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