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Jobless claims higher than expected

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This morning's jobless claims number for the latest weeks showed applications for state unemployment benefits rose by 10,000 to 383,000, which was higher than the 375,000 level economists had expected. The closely watched four-week moving average rose 5,750 to 381,750. Continuing claims rose 44,000 to 3.5 million.

Today's unemployment numbers are being discounted somewhat by traders due to the holiday on Monday, which creates a shorter observation period and has had little impact on stock futures since their release.

Trade gap narrows

Imports and exports of goods fell to a 3-year low as weak global demand and a strong U.S. dollar has the December trade gap shrinking 11.4% to $25.3 billion. December imports dropped 2.9% to $103.2 billion and exports rose just 0.2% to $77.9 billion. The trade gap totaled $28.5 billion in November and many analysts were looking for the December trade gap to stay at November levels. The narrower-than-expected trade gap will likely lead the Commerce Department to revise its 0.2% estimate of fourth- quarter gross domestic product higher when it announces its second estimate next week.

Nikkei jumps 4.7%

Tokyo's benchmark Nikkei stock index jumped 4.7% to 10,295 on Thursday as hopes for a government anti-deflation package along with yesterday's strong performance from markets here in the U.S. created conditions for a strong round of buying in Japan. The rally in the Nikkei was the biggest percentage gain seen in Tokyo since March 26, 2001. The broader Topix also rallied with a gain of 3.3% to 988.89.

BellSouth lowers 2002 guidance

Telecom stocks here in the U.S. may be under some continued pressure today after BellSouth (NYSE:BLS) $40.45 said that 2002 revenue and earnings are being negatively impacted by currency devaluations and deteriorating economic conditions in Argentina and Venezuala. BellSouth said it now sees total operating revenue growth (including Cingular Wireless) of 2 to 4% for 2002 and normalized earnings-per-share growth, excluding foreign- exchange effects, of 3 to 5%. First Call had projected 2002 EPS growth of 5.5% from 2001 levels. BellSouth also lowered its capital expenditures projection by $500 million to a range of $4.8 billion to $5 billion due to continued weakness in demand, primarily in the domestic telecom market.

Stock futures lower

Stock futures have been in the red all morning and have been holding at current levels for the past hour. S&P futures currently trade lower by 4 points at 1,096, NASDAQ futures are down 13 points at 1,400 and Dow futures are off 31 points at 9,936.

Fair value for the S&P 500 today is $0.12. HL Camp & Company has their computers set for program buying at $1.36 and set for selling at $-1.04. Fair value for the NASDAQ-100 today is $2.42.

Jeff Bailey
Senior Market Technician
Option Investor

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