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Jobless claims lower than expected

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This morning's jobless claims number shows 373K Americans filed for first time unemployment benefits for the week ending February 9th and that was less than the consensus estimate of 380K.

Jobless claims continue to hover below the 400,000 mark this year and many economists say this points to a stabilization in the number of layoffs that will eventually lay the groundwork for an economic recovery.

In a separate report, the Commerce Department reported U.S. business inventories fell -0.4% in December, marking 11 straight months of declines. Sales were relatively flat in December, even as factories reported a +0.6% increase in sales of their products. The inventory-to-sales ratio stood at 1.39 in December, which looks to be the same as November's level. Inventories at manufacturers fell -0.6%, retailers showed a -0.1% decline, while wholesaler inventories dropped -0.6%. Inventories of cars in December were at their highest since August, a Commerce official said.

Stock futures green

Stock futures are higher this morning and have been holding the higher ground even prior to this morning's economic data. Last night earnings from Hewlett Packard (NYSE:HWP) that beat estimates by 4-cents are helping boost some technology gains.

S&P futures are trading higher by 2.9 points at $1,121, NASDAQ futures are up 9.5 points at $1,495 and Dow futures are edging up 24 points at $10,017.

Fair value for the S&P 500 today is $0.14. HL Camp & Company has their computers set for program buying at $1.44 and set for selling at $-0.88. Fair value for the NASDAQ-100 today is $2.56.

Travel and Entertainment expenses bottoming

JP Morgan is upgrading shares of American Express (NYSE:AXP) $34.01 this morning to "buy" from "market perform" with a $40 price target after recently meeting with the company. JP Morgan believes that corporate T&E budgets have bottomed out.

Checking out, then checking in.

Hotels are getting some mixed reviews this morning from Merrill Lynch. Merrill is checking out of Marriott International (NYSE:MAR) $39.36 with a downgrade to "near-term buy" from "strong buy" based on valuation and the belief that the manager/franchiser tends to benefit the most during periods of accelerating hotel construction growth, which has not happened yet.

Merrill instead will "check in" at Hilton Hotels (NYSE:HLT) $11.66 and upgrades this hotel stock to "strong buy" from "buy." Merrill sees lodging stocks as attractive at the bottom of a recession, and feels HLT is poised to benefit as demand improves, supply growth slows, and RevPAR accelerates. Merrill feels the shares of HLT have a compelling valuation versus peers, especially given prospects of strong free cash flow in 2003. Merrill's price target is $16.

Jeff Bailey
Senior Market Technician
Option Investor

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