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Extending losses

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As the final hour of today's trade for equities approaches, the major indexes have extended their losses from the mid-session lows with the Dow Industrials (INDU) 8,955 -1.19% now lower by 108 points, the broader S&P 500 Index (SPX.X) 974 -1.4% lower by 13.7 points and just now edging below the 975 level which sets the stage for a test of WEEKLY S1 of 965, and the narrower NASDAQ-100 Index (NDX.X) 1,190 -1.87% falling 22.8 points as the Biotechnology Index (BTK.X) 459.71 -4.78%, Disk Drive Index (DDX.X) 102.34 -3.72% and Semiconductor Index (SOX.X) 376 -3.10% extend their session losses.

All sectors that I follow on a daily basis are now in the red with the exception of the Oil Service Index (OSX.X) 96.49 +0.3%. The August Light, Sweet Crude Oil futures (cl03q) $30.50 +0.79% are firmly back above the $30.00 level, gaining $0.24 in today's session.

The Disk Drive Index (DDX.X) 102.34 -3.72% saw an extension of earlier losses after Punk Ziegel downgraded select enterprise storage stocks, saying valuations have gotten ahead of fundamentals. While not components of the Disk Drive Index (DDX.X), the downgrades in storage stocks QLogic (QLGC) $48.40 -5.14%, Brocade (NASDAQ:BRCD) $6.85 -6.16%, McData (NASDAQ:MCDT) $12.76 -5.27% and Emulex (NYSE:ELX) $23.95 -2.28% are weighing on broader disk drive storage and larger enterprise storage stocks.

Goldman Sachs also cut its rating on QLogic (QLGC) today with an "underperform" rating from "inline," based mainly on valuation.

Earlier gains in Dow telephone components SBC Communications (NYSE:SBC) $25.74 -2.57% and AT&T (NYSE:T) $19.35 -0.1% have execcerbated this afternoon's declines for the Dow Industrials. This morning, shares of SBC rose to as high as $27.35 after Lehman Brothers upgraded the stock to "overweight" from "underweight," but that upgrade looks to have lost early upside trade. Later today, handset maker Nokia (NYSE:NOK) $17.80 +0.28% will provide its mid-quarter update and with this morning's warning out of Motorola (NYSE:MOT) $8.58 -3.48% still fresh in investors minds, both the Combined Telecom Index (IXTCX) 141.55 -1.91% and North American Telecom Index (XTC.X) 497.10 -1.72% see a lower trade.

Shares of Motorola (MOT) $8.58 -3.48% have rebounded to their best levels of the session after a morning low of $8.34 found buyers just above its trying to round higher 50-day SMA of $8.32.

Jeff Bailey

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