By Kate Gibson
The U.S. stock market's fall on Thursday had investors steering
clear of three-month intraday lows tested earlier in the week, with
the bear-market bottom called by some in November holding for now
-- yet in the final hour of trading, the Dow Jones Industrial
Average readied for its lowest close since October, 2002.
The Dow Jones Industrial Average (DJI) on Thursday wavered
between positive and negative territory, but fell to session lows
with the trading session in its final hour. The Dow was lately off
64.75 points at 7,490.88, with the blue-chip on track to its lowest
close since October 2002.
"I'm not a big support-resistance person, but 7,500 seems to be
on everybody's mind; it's a perception problem. If we close below
7,500 it's going to worry a lot of armchair investors," said Jack
Ablin, chief investment officer, Harris Private Bank.
The blue-chip index on Tuesday fell nearly 300 points to close
at 7552.6, just 0.31 points from matching a 51/2-year low hit on
Nov. 20, 2008.
Financials fronted Thursday's declines, with Hartford Financial
Services (HIG) among the hard hit, its stock off more than 22%.
The S&P 500 Index (SPX) fell 5.93 points to 782.49, and the
Nasdaq Composite Index (RIXF) declined 17 points to stand at
1,45097.
Nick Kalivas, an analyst with MF Global Research, said
bearish-leaning sentiment would likely propel another broad-market
run at November lows.
In looking at S&P 500 futures, "best guess for today's
range: 785 to 743," Kalivas wrote of S&P 500 futures in a note
ahead of Thursday's open.
While the Dow and S&P broke their mid-January lows earlier
in the week, the Nasdaq offered an encouraging sign by holding
above its comparable level, according to Marc Pado, U.S. market
strategist at Cantor Fitzgerald.
"Investor resolve is clearly getting tested, although I would
say that this is a balancing act between the fact that the economy
is continuing to deteriorate, although no one anticipated a
turnaround anytime soon, and the argument over the effectiveness of
the stimuli being injected from every direction," he said.
"As February continues to wilt away, I am maintaining my
thus-far-correct position that equities are not priced for a
continuation of the severe economic contractions we've seen in the
fourth quarter and first quarter," said Dan Greenhaus, an analyst
with the equity strategy group at Miller Tabak & Co.
"We are, of course, going to overshoot on the downside, but my
position at the end of last year remains the same as it does now,
in the 700 range," Greenhaus said.