By Kate Gibson
The U.S. stock market's fall on Thursday initially 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 -- yet the Dow Jones Industrial Average finished at a more
than six-year low.
The Dow Jones Industrial Average (DJI) sunk 89.68 points, or
1.2%, to end at 7,465.95, with the blue-chip index ending at its
lowest level since Oct. 9, 2002.
"I'm not a big support-resistance person, but 7,500 seems to be
on everybody's mind; it's a perception problem," said Jack Ablin,
chief investment officer, Harris Private Bank.
A close below 7,500 would "worry a lot of armchair investors,"
Ablin said, ahead of the final bell.
The blue-chip index on Tuesday fell nearly 300 points to close
at 7552.6, just 0.31 points shy of 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 nearly 25%.
The S&P 500 Index (SPX) fell 9.48 points, or 1.2%, to
778.94, and the Nasdaq Composite Index (RIXF) declined 25.15
points, or 1.7%, to stand at 1,442.82.
Nick Kalivas, an analyst with MF Global Research, said before
the close that bearish-leaning sentiment would likely propel
another broad-market run at November lows.
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, said 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.