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Stock futures slip before open

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Stock futures have been inching lower prior to today's open for stocks. S&P futures are currently down 1 point at 1,124. NASDAQ futures were trading higher earlier this morning, but have slipped back to the unchanged level at 1,612. Dow futures are down 9 point at 9,832. While futures are slipping, they are holding above their fair value and still indicate a higher open.

Fair value for the S&P 500 today is $1.84. HL Camp & Company has their computers set for program buying at $2.94 and set for selling at $0.24.

Amgen to buy Immunex for $16 billion

The world's largest biotech company Amgen (NASDAQ:AMGN) announced this morning that it intends to buy Immunex (NASDAQ:IMNX) for $16 billion in a stock and cash deal. Terms of the acquisition call for Immunex shareholders to receive 85 percent of the exchange in Amgen stock and 15% in cash. This equates to roughly $4.50 in cash and the rest at a fixed ratio of 0.44 Amgen shares for each share of Immunex. On Friday, shares of Immunex (IMNX) finished the trading session at $25.62 and are trading higher by $1 at $26.62. Shares of Amgen finished Friday's session at $56.03 and trade down $2 at $54.03.

Bidding war shaping up in cruise industry

A bidding war has started as Carnival Corporation (NYSE:CCL) said it is planning on approaching P&O Princess Cruises (NYSE:POC) with a $4.5 billion takeover offer. Over the weekend, P&O Princess said its board rejected the Carnival offer, saying it will stay with Royal Caribbean Cruises' (NYSE:RCL) planned acquisition of several weeks ago. The board of Carnival said Carnival's (CCL) offer wouldn't deliver value to shareholders and carried regulatory risk in the United States as well as the European Union. Shares of U.K.-based P&O Princess (POC) spiked 5.5% in London trading, while shares of Royal Caribbean (RCL) fell 12.7% in Norway, on fears of a pending bidding war.

Triple-witching this Friday

Traders and investors should expect some volatility this week, ahead of Triple-witching this Friday. Expect some tax-loss and tax-gain selling to also come into play as individual investors continue to make some end-of-year adjustments in their accounts. The last couple of months may have created some handsome gains that may be sold near-term to offset some rather unpleasant losses since January, but help an investor begin 2002 with a rather clean slate.

Stocks that have made sharp moves higher in recent months may be susceptible to some short-term tax-gain selling, that also be matched with some tax-loss selling by a shareholder that has held the stock since the beginning of the year.

This week, expect some volatility.

Jeff Bailey
Senior Market Technician
Option Investor

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