US STOCKS-Wall St hit by weak jobless, manufacturing data

* 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 1.8 pct, S&P down 2.1 pct, Nasdaq down 2 pct

* For up-to-the-minute market news see [STXNEWS/US]
(Updates to midday, changes byline)

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
heated up the debate over the economic recovery.

Stocks most sensitive to the economy’s performance were hit
the hardest, including manufacturer 3M (MMM.N: ), which lost 2.7
percent, while aircraft maker Boeing (BA.N: ) gave up 2.5
percent.

Energy and materials shares also lost ground as the price
of oil fell toward $74 a barrel. Exxon Corp (XOM.N: ) fell 1.8
percent to $59.06.

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

The news followed announcements this week of a takeover bid
for the world’s largest fertilizer supplier and a large
acquisition in technology involving Dell Inc (DELL.O: ).

McAfee surged 57.4 percent to $47.10, while Intel slipped
3.5 percent to $18.91, weighing on the Nasdaq.
[ID:nN19252526].

Data showed first time claims for jobless claims rose to a
nine-month high last week, while factory activity in the
mid-Atlantic region contracted in August for the first time
since July 2009. Manufacturing has been a driver of growth as
the economy climbs out of recession, making the Philadelphia
Federal Reserve factory survey particularly worrisome.

“The debate is are we having a soft patch or a double dip
and the answer is, nobody knows,” said Linda Duessel, market
strategist at Federated Investors in Pittsburgh.

“What you do know about soft patches, though, is that the
stock market will trade either down or flat in those periods,
while it worries about the double dip.”

The Dow Jones industrial average (.DJI: ) dropped 187.01
points, or 1.80 percent, to 10,228.53. The Standard & Poor’s
500 Index (.SPX: ) shed 22.41 points, or 2.05 percent, to
1,071.75. The Nasdaq Composite Index (.IXIC: ) lost 44.59 points,
or 2.01 percent, to 2,171.11.

In earnings news, Sears Holdings Corp (SHLD.O: ) tumbled 7.5
percent to $62.19 after the department store chain reported a
wider-than-expected quarterly loss due in part to a lackluster
performance by its Kmart discount chain. [ID:nN19238600]. The
index of consumer discretionary shares (.GSPD: ) fell 2.4
percent.

Shares of 3M fell $2.22 to $81.39 and Boeing was off $1.54
to $64.46.

August options are set to expire on Friday, which could
generate more volume and amplify stock moves as traders adjust
their hedges.

Such dynamics can lead to pinning, where a stock or index
closes at or around its corresponding at-the-money option
strike.

Ahead of the expiration, the S&P 500 index has been slowly
moving toward the 1,100 strike, where there have been
indications of a potential pinning, said Scott Fullman,
director of derivative investment strategy at WJB Capital
Group. Indications are also pointing to a likely pinning at the
$110 strike price for the SPDR S&P 500 (SPY.P: ) fund, he said.
(Reporting by Leah Schnurr; Additional reporting by Angela
Moon; Editing by Kenneth Barry)

US STOCKS-Wall St hit by weak jobless, manufacturing data