Stocks fall for the second straight session as profit taking continues. The Dow ($INDU) fell 41.11 points to a level of 9,707.44. The S&P 500 ($SPX) lost 10.09 points to 1,050.78. The Nasdaq ($COMPQ) gave up 23.81 points to 2,107.61. Volume was moderate on the session with the NYSE trading 1.35 billion shares and the Naz turning over 2.63 billion shares. Market breadth was negative by a 7-to-23 and 7-to-20 margin on the Big Board and Naz respectively.

Economic news was mixed Thursday with jobless claims bullish, but existing home sales falling short of expectations. This led to declines in home builder stocks. An upgrade of several retail stocks by Goldman Sachs wasn't enough to push the retail sector higher, although A123 Systems (AONE) began its public life with a bang. Overall, stocks have fallen as traders have taken profits on the view the Fed will start easing back its stimulus.

Existing home sales fell 2.7 percent in August to a level of 5.10 million units when a reading of 5.35 million was expected. Not all the news was negative though with supply falling to 8.5 months, a 2 ½ year low. Now traders will await the new home sales data due out Friday. Shares of Beazer (BZH) and Hovnanian (HOV) fell 3.99 percent and 6.71 percent respectively.

Thursday's declines might have been worse if it wasn't for a surprise drop in jobless claims. Jobless claims fell by 21,000 for the week ending Sept. 19 to a level of 530,000. This put the four-week moving average at 553,500, its lowest level since January. Continuing claims also declined, off 123,000 to a level of 6.138 million. This news has economists looking for an improved reading in nonfarm payrolls for September.

Shares of AONE began trading for the first time Thursday and the stock got off to a great start. The maker of lithium-ion car batteries saw its shares rise 50.15 percent to $20.27 today after being priced at $13.50. This is a positive sign as it shows interest in new issues.

Electronic Arts (ERTS) shares fell 2.7 percent on the session after Microsoft (MSFT) stated it has no interest in buying the video game maker. On Wednesday, the stock rallied on rumors MSFT would make an offer. ERTS closed at $19.29 with MSFT rising 0.89 percent to $25.94.

Jody Osborne
Senior Writer & Options Strategist
Optionetics.com ~ Your Options Education Site