Friday’s Options Alerts

The major indexes gapped lower
at the open and entered a choppy range that lasted until around 1:30 p.m. ET,
where selling brought prices further down.

The Dow Jones Industrial
Average ($INDU.X)
closed 2.81% at 7942.39. The S&P 500 ($SPX.X)
closed -3.00% at 843.32. The Nasdaq ($COMPQ)
closed -2.84% at 1216.45.

Today’s weakness was largely
attributed to a horrifying profit warning from EDS (EDS),
-52.82% at 17.20, as they claimed spending on services has virtually stopped.

The Semiconductor Index
($SOX),
-3.93% at 252.46, made a new four-year low, and the Broker Dealer Index ($XBD),
-5.58% at 368.73, broke key support of 380 on its daily chart. Both sectors
closed at the bottom of their ranges, indicating likely continued momentum at
tomorrow’s open, which will be a Triple Witching session.

The only positive sector at the
close was gold and silver ($XAU),
+2.72%.

The biggest losers of the day
were broker dealers ($XBD),
-5.53%, biotechnology ($BTK),
-5.45%, Internet ($MOX.X),
-4.53%, and telecoms ($XTC),
03.99%.

U.S. Treasury Bonds
closed up ’10 at 114 ’08.

In economic news, jobless
claims fell 9,000 to 424,000 for a four-month high, while analysts were
looking for 415,000 claims. Housing starts were reported at 1.609 million
vs. an expectation of 1.645. Also, the Philadelphia Fed came in at 2.3
vs. an expectation of 2.0.

Volume was better than
average at 1,449,597,000
on the NYSE, and 1,506,212,000
on the Nasdaq.

The only Dow stock to go
positive today was Allied Capital (ALD),
+0.92% at 20.80.

Leading the Dow down were
IBM (IBM)
-6.82% at 64.80, Walt Disney (DIS),
-5.90% at 14.81, Phillip Morris (MO),
-5.03% at 44.70, Citigroup (C),
-5.01% at 26.65, and Merck Co. (MRK),
-3.97% at 45.19.