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Durable goods orders strong

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This morning's durable goods order number shows a jump of 12.8% in October. Today's strong number was led by a 38.8% increase ($60.1 billion) in transportation orders as orders for defense aircraft and parts surged 750 percent to $15.4 billion. Non- defense aircraft orders jumped 49.3% to $5.4 billion. Excluding the strong transportation numbers, durable goods orders rose a more modest 3.4%, which is the largest increase in 17 months. Excluding all defense orders, total orders rose 5.6%.

Today's 12.8% increase in durable goods orders has shocked many economists. Their estimates for October durable goods were just 2.1%. Durable goods orders are considered a leading economic indicator of industrial activity.

First time claims for unemployment rose 54,000

Other economic data out this morning shows that first time claims for unemployment rose 54,000 to 488,000, while continuing claims rose to a year high of 4.02 million, which is a 19-year high. Economists had expected today's unemployment to come in at 441,000 and today's number was worse than expected.

Stock futures showing gains

Stock futures are showing gains this morning with S&P futures higher by 2 points at 1,131. NASDAQ futures are higher by 10 points at 1,569 and Dow futures are up 27 points at 9,740.

Fair value for the S&P 500 today is $0.75. HL Camp & Company has their computers set for program buying at $2.23 and set for program selling at $0.53. Fair value for the NASDAQ-100 today is $2.42.

Brocade beats by a penny

Technology stocks are getting a boost this morning after last night's earnings from Brocade Communications (NYSE:BRCD), which beat estimates by a penny. For the latest quarter, BRCD reported earnings of $10.9 million or 5 cents a share, on sales of $116.5 million. Analysts were looking for earnings of 4 cents a share on revenue of $110.0 million. In the year-ago period, BRCD reported earnings of 11 cents a share on revenue of $132.1 million. Yesterday, the networking concern finished trading at $28.82 and are trading at $30.35 in pre-market action.

Jeff Bailey
Senior Market Technician
Option Investor

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