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Consumer prices show little inflation

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Consumers saw little inflation for the products they bought in January as depicted by today's consumer price index (CPI) numbers. For January, prices at the consumer level rose just 0.2%, which was inline with expectations of economists. The core rate also rose a modest 0.2%.

The CPI is just 1.1% above its level a year ago, a rate of increase that most economists consider to be very tame inflation.

In January, energy costs overall were up 0.9% as gasoline prices rose 2.7%. The jump in gasoline prices was the biggest rise in four months. Food costs were up 0.3%, led by a 4.1% price jump in fruit and vegetables.

Other goods showing some price gains were hospital care rising 0.9%, tobacco rising 0.3%, housing prices rose 0.2% and airfares rising 0.4%. Auto prices fell -0.6% in January, the biggest decline in almost 15 years. Clothing prices fell 0.7%.

Newsday saying Computer Associates under investigation

Software maker Computer Associates (NYSE:CA) $25.31 are going to be under some selling pressure at the open of trading after Newsday reported that the U.S. attorney for the Eastern District and the FBI have "launched a preliminary investigation of whether Computer Associates violated federal criminal fraud laws through its accounting practices." The Newsday report said its sources said that the CA investigation is in its initial stages and that there is no firm evidence that anything illegal has taken place. Newsday cited a former CA employee, who was contacted by the U.S. attorney's office several weeks ago and asked questions on the way CA has reported revenue in its financial statements.

Computer Associates said it hadn't been contacted by authorities "regarding any investigation and do not know what, if anything, is being investigated. The reporting of our financial results has always been in accordance with all applicable accounting principles. CA added "if there are questions, we look forward to being contacted and to having the opportunity to defend against hearsay and what we believe will prove to be unwarranted concerns."

Stock futures look to dig in

Stock futures are edging higher this morning as S&P futures trade up 3.3 points at 1,087. NASDAQ futures are higher by 7.5 points at 1,402 and Dow futures are up 42 points at 9,780.

Fair value for the S&P 500 today is $0.12. HL Camp & Company has their computers set for program buying at $1.58 and set for selling at $-0.94. Fair value for the NASDAQ-100 today is $2.56.

Jeff Bailey
Senior Market Technician
Option Investor

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