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-NYSE down 177.3 (2.9%) to 5,776.76.

-DJIA down 223.3 (2.6%) to 8,281.

-S&P 500 down 26.8 (2.9%) to 896.54.

-Nasdaq down 49 (2.7%) to 1,797.

GLOBAL SENTIMENT

Hang Seng down 1.09%

Nikkei down 0.64%

FTSE down 2.34%

UPSIDE MOVERS

(+) ELN confirms deal with J&J (JNJ).

(+) IPCR gains on hopes for bidding war.

(+) MESA gains as appeals court rules in favor of company in Delta (DAL) deal.

(+) FCSX to merge with IAAC.

(+) CAL gets analyst upgrade.

(+) HRSH to be bought by CEO for $0.31 per share cash.

(+) GST sells Australian assets for $240 mln.

(+) ESLR gets upgrade.

(+) ACUR gets complete response letter for Acurox NDA.

DOWNSIDE MOVERS

(-) XLNX sees June quarter sales down sequentially.

(-) TIVO comments on contempt order stay granted EchoStar.

(-) RAD says June same-store sales down 0.6%.

(-) WAG says June same-store sales up 3.4%.

(-) MANH lowered Q2 earnings outlook.

(-) CSCO declines with broader market; Deutsche Bank starts coverage at Buy.

(-) ILMN continues evening decline that followed revenue warning.

MARKET DIRECTION


The major stock averages end down between 2% and 3%, at or near the session's lows after disappointing job market and factory data. The trading session on the NYSE was extended by 15 minutes at day's end due to technical glitches. The broader DJIA and S&P 500 will close the books on a third straight weekly decline, the longest such streak since March, when stocks were hitting 12-year lows. All major averages will end 2% lower for the week.

Stocks saw a broad-based selloff after larger-than-expected job losses in June and a smaller-than-expected rise in May factory orders. Losses were exaggerated by thin trading volumes ahead of the three-day holiday weekend. Markets are closed on Friday for the 4th of July holiday.

Sending a jolt through stock trading, nonfarm payrolls shed 467,000 in June, more than the 325,000 decline expected.

The unemployment rate ticked higher to 9.5% in June from 9.4% in May. That rate is the highest in 26 years, although economists had expected the unemployment rate to rise even higher, to 9.6%. Average hourly earnings were flat at $18.53.

Meanwhile, May factory orders rose 1.2%, less than economists' average expectations for 1.4%. Excluding transportation equipment, new factory orders were up just 0.8%.

Around the world, the European Central Bank left its key interest rate at an all-time-low 1%, inaction that was widely expected in financial markets.
However, overseas markets were hurt after a report showed unemployment in the 16 countries that use the euro rose to a 10-year high in May.

Mergers and acquisitions news led headines and provided the backdrop for a few rare stock gainers today.

Elan (ELN) and Johnson & Johnson (JNJ) confirmed earlier reports of a definitive agreement whereby Johnson & Johnson will acquire substantially all of the assets and rights of Elan related to its Alzheimer's Immunotherapy Program (AIP Program), through a newly formed company. In addition, Johnson & Johnson, through its affiliate, will invest $1 billion in Elan in exchange for newly issued American Depositary Receipts (ADRs) of Elan which will represent 18.4% of Elan's outstanding ordinary shares.

IPC Holdings (IPCR) is higher on hopes of a bidding war between Validus (VR) and Flagstone (FSR).

FCStone Group (FCSX) is softer despite a buyout from International Assets (IAAC) for $130 million in stock.

NRG Energy (NRG) shares slip after Exelon (EXC) boosted its hostile buyout offer for the electricity generator by 12%. EXC said it would exchange 0.545 shares of its own stock for every NRG share, up from 0.485 shares per NRG share. NRG told shareholders not to act on the offer yet as its Board considers the revised offer.

Tech shares broadly declined. Cisco (CSCO) fell even as Deutsche Bank started coverage on the stock with a Buy rating. Xilinx (XLNX) shares are soft after the company says it expects June quarter sales to be down about 5% sequentially, worse than prior guidance for down 4% to up 4% sequentially.

Retailers were down after Rite Aid (RAD) slid on a 0.6% drop in June same-store sales. Walgreens (WAG) was a touch softer after the company said same-store sales rose 3.4% in June.

August crude futures closed down $2.58, or 3.7%, to $66.73 a barrel, the lowest price in a month. The contract hit an intraday low of $66.54 in the wake of deeper-than-expected job losses for June, which may reflect weakening consumer demand for energy going forward. Futures lost 3% this week and posted the third straight weekly loss.

Source: Closing Update for July 2