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Durable goods orders rise 2%

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The Commerce Department said durable goods orders rose 2% to $176.4 billion in December, which was slightly stronger than economist's guess for a rise of 1.2%. December's durable goods orders number rounds out a 12.8% decline in durable goods orders for all of 2001.

In December, shipments for durable goods rose a modest 0.5% while unfilled orders fell for the 11th time in 2001, dropping 0.7%. Inventories also fell for the 11th consecutive month, down -0.4%. Today's durable goods orders will most likely reassure Federal Reserve policymakers that the yearlong slump in manufacturing may be reversing itself. The Federal Open Market Committee begins a two-day meeting this morning. No change in interest rates is expected.

The 2% rise for durable goods in December had most sectors that manufacture big ticket items designed to last at least three years reporting gains. Transportations orders rose 3.5%, including a 6.8% gain in aircraft and a 0.2% increase in motor vehicles. Excluding transportation, orders rose 1.4%.

Orders for computers and electronic products gained 3.5%, including a 13.3% increase in semiconductors. Orders for electronic fell a staggering 21.8% for 2001.

Machinery orders gained 1.7%, while orders for fabricated metals rose 1.4% and orders for primary metals fell 0.5%.

Defense capital goods orders rose 10.8% and rose a robust 40.5% for 2001.

Stock futures fractionally positive

Stock futures are fractionally higher this mornings as S&P futures trade up 20-cents at $1,135.70, NASDAQ futures are higher by 7.5 points at $1,580 and Dow futures are higher by 11 points at $9,878.

Fair value for the S&P 500 today is $0.57. HL Camp & Company has their computers set for program buying at $1.38 and set for program selling at $-0.78. Fair value for the NASDAQ-100 today is $3.37.

Consumer confidence later this morning

Later this morning (10:00 AM EST) consumer confidence numbers are scheduled for release. Economists are looking for a reading near 96.0.

Jeff Bailey
Senior Market Technician
Option Investor

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