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US STOCKS-Wall St edges down, S&P near technical danger zone

Published 06/06/2011, 09:46 AM
Updated 06/06/2011, 09:48 AM
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* S&P 500 may test April low at 1,294.70

* Apple's Jobs to make presentation after medical leave

* S&P 500 off 0.1 pct, Dow off 0.1 pct, Nasdaq up 0.1 pct

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

By Edward Krudy

NEW YORK, June 6 (Reuters) - The S&P 500 slid further toward a technical danger zone near its April low on Monday after signs of a slowing economy pushed the index to five weeks of losses and investors saw more coming.

The broad-based index has fallen 4.5 percent since a recent high at the start of May and is trading at six-week lows after falling through key technical support levels. Investors are eyeing the index's low for April.

"The next two support levels, the important ones, are April 18 1,294.70, and then thereafter the March 16 1,249.05," said Wayne Kaufman, chief market analyst at John Thomas Financial in New York. "Whether the support levels hold or not, there is still no demand for stocks."

At times of uncertainty investors and traders often use widely followed levels as a "line in the sand" to manage risk. Analysts said breaching those levels could lead to more selling.

In a sign the weak economy was threatening earnings, JP Morgan cut its rating on home improvement chain Lowes Cos Inc to "neutral" from "overweight" on concerns about softening home prices and stagnant job growth. The shares fell 0.8 percent to $23.24.

The Dow Jones industrial average <.DJI> dropped 7.68 points, or 0.06 percent, to 12,143.58. The Standard & Poor's 500 Index <.SPX> dropped 1.88 points, or 0.14 percent, to 1,298.28. The Nasdaq Composite Index <.IXIC> gained 1.71 points, or 0.06 percent, to 2,734.49.

A much weaker-than-expected jobs report on Friday was the latest disappointing economic news to hit sentiment. The S&P 500 fell 2.3 percent for the week, its worst since August. The index ended Friday with its fifth straight week of losses.

Kaufman said the recent falls had made stock valuations their most attractive since November, which could be a catalyst to drive the market higher ahead of second-quarter earnings season in July.

In one potential bright spot for investors, Apple Inc Chief Executive Steve Jobs takes to the stage in San Francisco Monday and could take the wraps off what investors hope will be the next source of growth for the company. The shares rose 0.9 percent to $346.37. For details, see [ID:nN05178142] (Editing by Jeffrey Benkoe)

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