WALL STREET >>> Unimpressive Bulls

The major US market indexes sacrificed key technical support levels

Monday started off promising as the Dow climbed more than 90 points at the opening bill amid enthusiasm for the latest developments on the M&A front that suggest confidence in the economy and stock valuation.

If you were keeping an eye on the market last week, today's action had an eerily familiar ring to it. A flurry of merger-and-acquisition activity translated to early gains, but enthusiasm over Wall Street's renewed appetite for dealmaking quickly gave way to lingering economic concerns. There were no major data points on the docket today -- but with key reports on the housing market and second-quarter gross domestic product due out later this week, traders erred on the side of caution. Despite ramped-up bidding wars for 3Par and Potash Corp. stocks were struggling to stay above the breakeven line by midday.

By the close, all three major market indexes had given back their early gains to finish narrowly below short-term support levels -- opening the door for either an oversold bounce or a fresh wave of selling pressure on Tuesday.

The Dow Jones Industrial Average (DJIA – 10,174.41) sacrificed its recent perch above 10,200, racking up a daily deficit of 39.2 points, or 0.4%. Fourteen of the Dow's 30 components closed lower, led by Caterpillar and Cisco Systems, while Merck and Wal-Mart set the tone for the 14 gainers. Splitting the difference were Bank of America and Chevron, which both finished flat.

The S&P 500 Index (SPX – 1,067.36) settled just a hair's breadth below the recently supportive 1,070 neighborhood, with the index swallowing a loss of 4.3 points, or 0.4%. Finally, the Nasdaq Composite (COMP – 2,159.63) notched a daily deficit of 20.1 points, or 0.9%, ending on the south side of support at the 2,160 level.

Crude futures ended slightly lower today, with black gold moving inversely to the U.S. dollar. Less-than-stellar economic data out of the euro zone helped propel the greenback higher, making dollar-denominated oil futures less attractive. Plus, the same general skittishness that pressured stocks this afternoon bled over to oil futures and other riskier assets.
As a result, crude oil for October delivery ended the day on a drop of 72 cents, or roughly 1%, at $73.10 per barrel.

HAPPY TRADING