SAN FRANCISCO -- As has been the case in recent days, the market absorbed some potentially good news in the morning -- the European Central Bank's rate cut -- but couldn't stomach a rally.

The market's summer slide continued to accelerate into the season's (unofficial) waning, with the

Dow Jones Industrial Average

falling 1.7% to 9919.58, its first close below 10,000 since April 9. The

S&P 500

shed 1.7% to 1129.03, while the

Nasdaq Composite

dropped 2.8% to 1791.68; for both averages, it's the lowest close since April 9.

What with recent activity and the negative news from

Sun Microsystems

(SUNW) - Get Report

,

Corning

(GLW) - Get Report

,

Microsoft

(MSFT) - Get Report

and

Charles Schwab

(SCH)

, today's selloff wasn't terribly shocking.

"It doesn't take anything" to drive stocks lower, said one trader. "Every single piece of information is perceived as negative. The path of least resistance is definitely lower."

Still, there were some fleeting hopes that the ECB's rate cut might inspire some buyers, on the hope it would help spur global growth.

But there was disappointment that the central bank didn't cut rates more than 25 basis points and that it gave no indication further rate cuts are forthcoming. Also, ECB President Wim Duisenberg said in a news conference: "The slowdown in the U.S. is larger, deeper and lasting longer than had been anticipated," which did little to boost traders' spirits.

The dollar sank more than 0.5% vs. the euro and yen today, although currency traders said the move had less to do with the ECB than with dealings on Wall Street.

"The euro was not lifted by its own bank's rate-cut decision but weakness in the Dow and Nasdaq," said Darko Pavlovic, a currency analyst at MG Financial Group, a provider of currency trading services.

Pavlovic noted that the euro was "completely unmoved" by the ECB's rate-cut decision and didn't really start to rise until after the Dow traded below 10,000 around 11 a.m. EDT.

"Interestingly, the euro is not gaining strength from its own economy or

central bank but from weakness in the U.S.," he said. Today's personal income and jobless-claims data added to a feeling that the U.S. economic slump is going to be prolonged, he noted.

From another perspective, today's activity suggests the stock market is dictating activity in currency trading rather than vice versa. Regardless of which is the chicken and which is the egg, it appears the dollar and stocks are weakening in tandem.

Dust in the Wind

Whatever the myriad reasons for stocks' misery, the action has would-be bullish participants looking for something positive to cling to.

In an email to clients today, Brian Gilmartin, portfolio manager at Trinity Asset Management in Chicago, observed that 2001 is shaping up to be a mirror image of last year.

In April-May 2000, the market suffered a sharp correction, then rallied through the summer, peaking in the last days of August.

This year, the market rallied sharply in April-May but has sold off sharply since, with losses mounting into the last days of August.

"If the 'mirror image' pattern holds, then we should start to see the market begin to rally sometime by early September," Gilmartin wrote, admitting he's making an observation rather than basing that forecast on "rigorous statistical analysis."

Gilmartin oversees about $24 million in managed accounts; the 10 largest of those accounts were down an average of about 11% year to date at the end of July.

Already I can hear the snickers from those who've been emailing me of late with declarations of how any talk of rallies is folly -- based on valuations, the state of the economy and other fundamental factors. Maybe they're the only ones who've survived this year, but the bearish observers seem to be crowing particularly loudly of late.

Just today, I received an unsolicited call from Rick Berry, director of equity research at Empire Financial Group in Atlanta, who predicted that the Nasdaq will trade under 1000 and the S&P 500 between 850 and 900. Berry declined to specify a timetable but expressed tremendous confidence that such levels would be seen sometime next year.

The cynics may well be right. But anecdotally, their surer-than-ever attitude strikes me as a mirror image of emails I received in late 1999 and early 2000 from folks who assured me the bull market was a long, long way from ending.

Aaron L. Task writes daily for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. He invites you to send your feedback to

Aaron L. Task.