9:10am (EST)
The market zigzagged for much of Thursday’s session but there was trouble on the 2pm horizon after the Kansas City Fed spoke. Things took a turn for the worse for the bulls after hearing the region’s manufacturing index fell to 0 in August, down substantially from July’s reading of 14.
The news sparked a fresh wave of selling which sent the major averages below support levels once again.

The Dow finished with a loss of nearly 75 points, or 0.7%, closing at 9,985 and below the physiological 10,000 level. Cisco Systems (CSCO, $20.70, down $0.51) led the Dow lower as the index settled below 10,000 for the first time since early July.

We mentioned in our Weekly Wrap there was a good chance the bears would take out 10,000 this week and now their cross-hairs are on 9,800. The 10,000-10,100 area will now act as resistance today with 10,200 now the second layer of resistance going forward.
The S&P 500 fell 8 points, or 0.8%, to finish at 1,047 and below its own support level of 1,050. It was also the index’s first close under this level since July and 1,000 appears to be in play with a test to 950, possibly.
The Nasdaq got slugged for a double-deuce (22 points), or 1.1%, to settle at 2,118. We mentioned yesterday that Tech will lead the way up or down and the index managed to stay above the 2,100 level, for now. Our next near-term targets are 2,050 and if that level fails then the index could fall to 1,900 on panic selling.

In M&A (merger and acquisitions) news this morning, Dell (DELL, $11.75, down $0.04) announced that its bid to acquire 3Par (PAR, $26.03, down $0.73) for $27 per share has been accepted. The offer beat out another bid from Hewlett-Packard (HPQ, $38.22, down $0.02) last night after HPQ trumped Dell’s re-raised offer of $24.30.
Look for HPQ to come back with yet another bid.
Futures are pointing towards a decent open after hearing the latest gross domestic product (GDP) numbers. GDP for the second quarter came in better-than-expected at 1.6%, down from 2.4%, previously, and exceeded expectations for growth of 1.4%.
As a result, the Dow futures are higher by 57 points to 10,024 while the S&P 500 futures are up 8 points to 1,052. The Nasdaq 100 futures are showing a 13 point pop to 1,780 as we go to press.
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Tags: CSCO, Dell, option picks, PAR, stock options trading










