(Updates to midafternoon, changes byline)
By Leah Schnurr
NEW YORK (Reuters) - U.S. stocks slipped Friday,
plagued by renewed concerns the recovery will be weaker than
hoped and as bearish action in expiring August options kept
Hewlett-Packard Cowas among the biggest drags on
the Dow after several brokerages cut their price targets on the
computer maker's shares due to concern about demand for tech
products. HP fell 2.6 percent at $39.70.
Thursday's gloomy jobs and regional manufacturing data
remained in the forefront as investors debated how much the
recovery could slow. The S&P 500 was on track for its second
week of declines in a row.
"Not only were yesterday's numbers abysmal, but they
continued a trend for the last three or four weeks that's been
disappointing," said Alan Lancz, president at Alan B. Lancz &
Associates Inc in Toledo, Ohio.
"Any good news from earnings and guidance throughout the
earnings season has been trumped of late by more negative news
on the economy and the future outlook, and that's what's got
the market in more of a malaise."
The Dow Jones industrial average fell 89.30 points,
or 0.87 percent, to 10,181.91. The Standard & Poor's 500 Index
slid 7.50 points, or 0.70 percent, to 1,068.13. The
Nasdaq Composite Index was off 7.95 points, or 0.36
percent, to 2,171.00.
Friday's trading was also influenced by options activity
ahead of expiration at the end of the session, though analysts
noted action was quiet.
Larry McMillan, president of McMillan Analysis Corp, said
most of the August S&P 100 index open interest in
in-the-money call options has disappeared, either through
traders rolling or exercising their positions.
"As a result, there is a negative bias to the expiration
now," he said, explaining the move lower.
Call options convey the right to buy an index or stock at a
given price by a certain date, and open interest shows the
number of contracts traded but not liquidated.
McMillan said a close below 1,060 for the S&P 500 "would be
a signal to turn fully bearish."
Usually, added volume and amplified stock moves appear in
an options expiration week as traders adjust their hedges. Such
dynamics can lead to a strategy known as pinning in which a
stock or index closes at or around its corresponding
at-the-money option strike.
Natural resource stocks such as Exxon Mobil Corp
and Freeport McMoRan Copper & Gold Inc came under
pressure as U.S. crude oil fell 1.5 percent and copper futures
Exxon Mobil dipped 1.1 percent to $58.65, while Freeport
McMoRan was off 2 percent to $70.59.
A surge in shares of Marvell Technology Group Ltd
and Intuit Incstemmed declines on the Nasdaq as
forecasts from both cheered investors. Chipmaker Marvell gained
9.3 percent to $16.29, while software maker Intuit jumped 12.4
percent to $43.57.
(Reporting by Leah Schnurr; Additional reporting by Doris
Frankel; Editing by Kenneth Barry)