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Futures lower ahead of FOMC

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Stock futures are fractionally lower this morning with S&P futures trading down 3 points to 1039. NASDAQ futures are down 9.5 points to 1,150 and Dow futures are off 27 points at 8,830. Later today the FOMC is expected to make its announcement regarding the direction of interest rates and many analysts feel the Fed will cut at least 50-points to 2.5%, which would be the lowest rate in nearly forty years.

PC Makers active in pre-market trading

PC maker stock prices are under some selling pressure this morning after yesterday afternoon warning by Compaq Computer (NYSE:CPQ). Late yesterday Compaq (CPQ) warned that it expects a loss of in its third quarter. Shares of CPQ are indicating an open near $7.66 after finishing at $8.33 yesterday. Yesterday's warning by Compaq has renewed doubt that Hewlett-Packard (NYSE:HWP) will follow through with its plans to acquire Compaq. Shares of HWP are also bid lower this morning to $15.10 after finishing yesterday's session at $15.60.

Compaq's biggest rival, Dell Computer (NASDAQ:DELL) are bid fractionally higher this morning at $18.54, which is up $0.06 from yesterday's close of $18.48. Shares of Gateway Inc. (NYSE:GTW) finished yesterday's session at $4.90 and were hovering near that level this morning. Apple Computer (NASDAQ:AAPL) are trading down $0.05 to $15.49 in this morning's pre-market action.

Microsoft estimates cut at Robertson Stephens

Last night, Robertson Stephens lowered its fiscal 2002 and 2003 earnings estimates for Microsoft Corp. (NASDAQ:MSFT) to $1.85 from $1.94 and to $2.07 from $2.23 respectively. Robertson Stephens' analysts Eric Upin explained the lowering of estimates due to the deteriorating economic environment, as well as risk to the closure of the Expedia deal."

Jeff Bailey
Senior Market Technician

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