MARKET SNAPSHOT: Dow Industrials Head For Lowest Finish Since October 2002

By Kate Gibson

The U.S. stock market's fall on Thursday 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 for now -- yet in the final hour of trading, the Dow Jones Industrial Average readied for its lowest close since October, 2002.

The Dow Jones Industrial Average (DJI) on Thursday wavered between positive and negative territory, but fell to session lows with the trading session in its final hour. The Dow was lately off 64.75 points at 7,490.88, with the blue-chip on track to its lowest close since October 2002.

"I'm not a big support-resistance person, but 7,500 seems to be on everybody's mind; it's a perception problem. If we close below 7,500 it's going to worry a lot of armchair investors," said Jack Ablin, chief investment officer, Harris Private Bank.

The blue-chip index on Tuesday fell nearly 300 points to close at 7552.6, just 0.31 points from 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 more than 22%.

The S&P 500 Index (SPX) fell 5.93 points to 782.49, and the Nasdaq Composite Index (RIXF) declined 17 points to stand at 1,45097.

Nick Kalivas, an analyst with MF Global Research, said bearish-leaning sentiment would likely propel another broad-market run at November lows.

In looking at S&P 500 futures, "best guess for today's range: 785 to 743," Kalivas wrote of S&P 500 futures in a note ahead of Thursday's open.

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, according to 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.