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Stock futures hovering at unchanged

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Stock futures are rather mixed this morning amid news of a merger in the aerospace/defense sector, upgrades in the semiconductor space and lackluster forward outlooks. S&P futures currently trade near the unchanged level at 1,078, NASDAQ futures are edging higher by 7.5 points at 1,354 and Dow futures are down 15 points at 9,810.

Fair value for the NASDAQ-100 today is $0.12. HL Camp & Company has their computers set for program buying at $1.48 and set for selling at $-0.94. Fair value for the NASDAQ-100 today is $2.22.02

Northrop bids for TRW

A merger in the defense sector may have stock in that group seeing some action today after Northrop Grumman (NYSE:NOC) $117.80 said it intends to buy TRW Inc. (NYSE:TRW) $39.80 for $47 a share. Upon completion of the merger, Northrop said it would separate TRW's automotive business. Northrop sees the acquisition as being neutral to earning.

Semiconductor Upgrades

Chip stocks are getting a boost this morning after JP Morgan upgrades Xilinx (NASDAQ:XLNX) $34.01 and Altera (NASDAQ:ALTR) $19.82 to "buy" from "market perform" due to their attractive growth potential, near-term margin improvement, and some investor's misconception of their end market's (JP Morgan saying company's get nearly 70% of revenue from businesses such as networking, server and storage, industrial, and consumer electronic). JP Morgan also raised estimates for Xilinx (XLNX) Q1 and 2002. Both stocks were seeing some upside action with XLNX bid up $1.59 to $35.60 and ALTR seeing marginal gains at $20.35.

Circuit City warns

Retailer Circuit City (NYSE:CC) $23.59 warned that sales for January and February combined are running below expectations. As a result, the company is projecting that fourth-quarter earnings from the Circuit City business will be between $0.68-$0.71 a share, while total EPS, including CarMax contribution and increases in lease termination costs, will show earnings of between $0.70-$0.74. Circuit City announced it plans to separate the CarMax business from the Circuit City business in a tax-free split-off.

Jeff Bailey
Senior Market Technician
Option Investor

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