STOCKS NEWS US-Wall St tumbles; Dow hits lowest since '97

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U.S. stock market report [.N] 1310 ET 23Feb2009-Wall St tumbles; Dow hits lowest since '9 ------------------------------------------------------------------------------

U.S. stocks fell on Monday due to uncertainty about the success of the government's latest bid to shore up beleaguered banks, including Citigroup (C.N), while a drop in technology shares pulled indexes lower.

The Dow .DJI fell to its lowest intraday level since 1997, while the S&P 500 .SPX dropped below its Nov. 20 bear market closing low.

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Reuters Messaging: deepa.seetharaman.reuters.com@reuters.net 1242 ET 23Feb2009-US stocks may be poised to rally - analyst ------------------------------------------------------------------------------

The Dow has moved to a new low, but the Nasdaq 100 index .NDX, NYSE Composite .NYA and Russell 2000 .RUT have not, those indices are well above their own November lows. "This divergence is bullish," said Jay Shartsis, director of option trading at R.F. Lafferty & Co. Also bullish is the reduced number of daily new lows, recently at 519 which is far lower than the 2,900 seen on Oct. 10. But missing from the bullish evidence is the put/call ratio, which is not reflecting a high level of put activity. He noted the market-wide 21-day dollar-weighted put/call ratio is at 78 cents traded in puts for every $1 in calls. At the last two prior lows, this indicator was at 86 cents in puts for every $1 in calls. He added futures on the CBOE Volatility Index .VIX have been trading with noteworthy discounts to VIX cash, suggesting the VIX will fall -- and stocks rise. "I conclude that we are about to see a pretty good rally, without the blessing of the put/call ratio," he said.

Reuters Messaging: doris.frankel.reuters.com@reuters.net 1214 ET 23Feb2009-Players seek Iron Mountain puts before earns ------------------------------------------------------------------------------

Put options in records-management company Iron Mountain Co (IRM.N) turned active ahead of its quarterly earnings due on Thursday before the bell, said Frederic Ruffy, analyst at WhatsTrading.com. Its shares rose 1.86 percent to $20.26 after midday. In the options market, 3,932 put options traded against 543 calls. The top trade was in the April $17.50 strike put which changed hands 1,500 times and traded ask-side for 80 cents. On the International Securities Exchange, another 1,500 contracts traded and ISEE sentiment data suggests 93 percent were opening customer put buys, Ruffy added.

Reuters Messaging: doris.frankel.reuters.com@reuters.net 1201 ET 23Feb2009-GM's Canadian unit on track with restructuring ------------------------------------------------------------------------------

The Canadian unit of General Motors (GM.N) is on track with its restructuring program, though serious discussions are still needed before it qualifies for emergency aid, according to Tony Clement, Canada's Industry Minister.

The unit presented its proposal to back requests for repayable loans last week. Clement said the government had "the skeletal structure" of what the unit was planning. [ID:nN23338132]

Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net 1154 ET 23Feb2009-BMO cuts target for S&P 500 ------------------------------------------------------------------------------

BMO Portfolio Strategy on Monday cut its target on the S&P 500 .SPX to 950 because of weaker-than-expected fourth-quarter earnings, as well as a deterioration in its outlook for bank loan losses and energy prices.

The firm also cut its 2009 operating earnings outlook for the S&P 500 to $57 from $59. [ID:nWNAB5567]

Despite that, the firm wrote that its earnings outlook suggested that stocks were at or close to a bottom, "with a recovery likely over the next year."

Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net 1148 ET 23Feb2009-Markets fall on bank doubts, tech sell-off ------------------------------------------------------------------------------

Major U.S. indexes fell on Monday, dropping on uncertainty about the likely success of the government's latest move to shore up such weakened banks as Citigroup (C.N). The market was also pressured by weakness in large-cap tech stocks. [ID:nN23343982]

The Dow Jones industrial average .DJI fell 1.2 percent to 7,279.25 while the S&P 500 .SPX lost 1.5 percent to 758.67 and the Nasdaq .IXIC was off 2.1 percent to 1,410.84.

Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net 1137 ET 23Feb2009-US Steel puts in play, point to more losses ------------------------------------------------------------------------------

Option players apparently turned pessimistic on U.S. Steel Corp (X.N) and loaded up on the stock's put options, likely anticipating more losses in the steelmaker. Its shares fell 8.39 percent to $22.72 and sit above its 52-week low of $20.73. Buyers of the March $22.50 puts have been trading in large blocks since just after the opening bell, according to optionmonster's proprietary computer model which tracks unusual option activity, In the first hour of trade these puts traded over 10,000 contracts in an aggressive nature which has pushed its option implied volatility up more than 100 percent, said optionmonster co-founder Pete Najarian in comments on the Web site. So far, more than 14,500 contracts traded in that strike price exceeding its open interest. They fetched $2.85 a contract, up nearly 58 percent on the day. "U.S. Steel looks really cheap at these levels, but those put buyers expectations may be for further pressure," he said.

Reuters Messaging: doris.frankel.reuters.com@reuters.net