US STOCKS-Wall St drops on worry economy has stalled

* Intel to buy McAfee for $7.7 billion; McAfee shares soar

* Jobless claims rise to 9-month high

* Regional factory activity at lowest in a year

* Dow down 1.5 pct, S&P down 1.7 pct, Nasdaq down 1.6 pct

* For up-to-the-minute market news see [STXNEWS/US]
(Updates to midafternoon)

By Leah Schnurr

NEW YORK, Aug 19 (BestGrowthStock) – U.S. stocks (Read more about the stock market today. ) tumbled on
Thursday as disappointing jobs and regional manufacturing data
ratcheted up debate over whether the economic recovery has

Stocks most sensitive to the economy’s performance were hit
the hardest, including manufacturer 3M (MMM.N: ) and aircraft
maker Boeing (BA.N: ).

The latest M&A activity, which typically boosts Wall
Street’s mood, failed to stem the losses. Intel Corp (INTC.O: )
dipped 3.2 percent after it offered to buy security software
maker McAfee Inc (MFE.N: ) for about $7.68 billion. McAfee surged
57.2 percent to $47.05.

First-time claims for jobless benefits rose to a nine-month
high of 500,000 seasonally adjusted last week, while factory
activity in the mid-Atlantic states contracted in August for
the first time since July 2009. Manufacturing has driven growth
as the economy climbs out of recession, making the Philadelphia
Federal Reserve factory survey particularly worrisome.

“Even the most optimistic people have to concede the
economy at the very least has paused,” said Bill Strazullo,
partner and chief investment strategist at Bell Curve Trading
in Boston.

“We’ve poured all this money, both domestically and
globally, into reflating the economy and there was definitely
an impact. But now it looks like the impact of a lot of that is

The Dow Jones industrial average (.DJI: ) dropped 154.09
points, or 1.48 percent, to 10,261.45. The Standard & Poor’s
500 Index (.SPX: ) shed 18.83 points, or 1.72 percent, to
1,075.33. The Nasdaq Composite Index (.IXIC: ) lost 35.91 points,
or 1.62 percent, to 2,179.79.

Energy and materials shares also lost ground as the price
of oil fell toward $74 a barrel. Exxon Corp (XOM.N: ) fell 1.9
percent to $59.00.

Intel’s plan to acquire McAfee for cash followed
announcements this week of a takeover bid for Potash Corp of
Saskatchewan (POT.TO: ) (POT.N: ), the world’s largest fertilizer
supplier, and a large acquisition by Dell Inc (DELL.O: ).

Intel’s shares slipped to $18.97, weighing on the Nasdaq.

In earnings news, Sears Holdings Corp (SHLD.O: ) tumbled 7.9
percent to $61.97 after the department store chain reported a
wider-than-expected quarterly loss. [ID:nN19238600]. The index
of consumer discretionary shares (.GSPD: ) fell 1.9 percent.

Leading the Dow lower, 3M fell 2.5 percent to $81.50 and
Boeing was off 2.2 percent to $64.52.


The S&P 500’s daily moving average convergence-divergence,
which sent a sell signal last week, strengthened the bearish
call as the MACD line fell below the zero line.

Even so, short term support held, with the S&P bouncing off
the 1,070 level, which represented last week’s low. If the
index falls through that, the next potential support level is
around 1,060.
(Reporting by Leah Schnurr; Additional reporting by Rodrigo
Campos; Editing by Kenneth Barry)

US STOCKS-Wall St drops on worry economy has stalled