950824

American equities

mostly lower

CHICAGO: US stock index futures closed mostly lower, with September Standred and Poor's 500 index near session lows after a late wave of sell stops.

Some traders said the sell-off was led by late cash market declines before New York closed. They said that sparked a wave of sell stops in September S&Ps just under 558.25 and spurred some local selling.

Traders said the drop was exaggerated due to the thinness of the activity. They said there was little retail paper in the market. Estimated volume was about 67,000, but traders suspected that figure would be high.

Small program-related selling was seen in September S&Ps, but traders said program trading has been fairly subdued.

Next key support for September S&Ps rests near 557.45. If that level breaks, some traders expected a sharper sell-off.

Despite recent weakness, traders were still generally cautiously optimistic on stocks through yearend, expecting only periods of range-trade and mild softness.

September Nikkei weakened after aggressive selling from a large US firm to take profits, traders said. They said the firm sold about 800 September contracts on the day down to session lows.

Despite today's drop, traders remained bullish on Nikkei futures. They said the index was still being led by dollar/yen currency rates, with the Nikkei rising with a dollar gain.

September/December Nikkei rollover has started to heat up, traders said. They said between 300 and 400 calendar spreads traded today. With a large US firm bidding for the spread at 25.0 index points. A large US investment firm sold while the spread at 30.0 35.0 and 25.0 index points apart today, traders said.

In options, the largest trade came in the last hour of trading.

A large US firm bought 1,000 December S$P 540/560/580 put butterflies, traders said. That one trade helped pump up options volume by 4.00 contracts, they noted.

Implied S&P options volatility opened offered but firmed and steadied by late afternoon. September S&P implied, at-the-money options volatility closed near 10.9 percent.

On Thursday, traders will see US weekly initial jobless claims and July durable goods orders. A Reuter survey forecasts claims up at 342,000 in the latest week.

Durable goods orders were seen jumping 0.8 percent in July.

September S&Ps closed down 2.10 index points at 557.80, September midcaps up 0.15 at 211.20, September value line down 1.40 at 548.50 and September Nikkei down 190.0 at 17,800.-Reuter