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Economic data held few surprises

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This morning's economic data looks to have held very few surprises and jobless claims and consumer prices were in line with economist's expectations.

Claims for state unemployment benefits were practically unchanged in the latest week as first-time claims for benefits fell 12,000 to 371,000 from a revised 383,000, while the more closely watched four-week moving average rose by 2,500 to 379,000. Continuing claims rose 11,000 to 3.465 million with the four-week moving average of continuing claims also rising by 10,000 to 3.442 million. Initial claims, one of gauges of the labor markets, have been basically unchanged for the past seven sessions.

In a separate report, the Labor Department said consumer prices continued their modest upward climb in February, rising a tame 0.2%. Economists were expecting a CPI of 0.2%, so today's number is very much in line. The Core rate, which excludes the more volatile food and energy components, rose 0.3% as tobacco prices jumped 3.8% in February. Excluding tobacco, the core rate would have risen just 0.2%.

Stock futures have shown little change since this morning's economic data was released. S&P futures trade higher by 1.7 points at 1,154, NASDAQ futures are higher by 6 points at 1,461 and Dow futures are up 20 points at 10,520.

Fair value for the S&P 500 today is $2.51. HL Camp & Company has their computers set for program buying at $3.77 and set for program selling at $1.45. Fair value for the NASDAQ-100 today is $7.90.

Wild ride for PDLI

It's been a wild ride in after-hours and then pre-market trading for shares of biotech Protein Design Labs (NASDAQ:PDLI). Yesterday, the stock finished the trading session at $15.02 and then dipped as low as $12 after the company said that preliminary results from a Phase II clinical trial of psoriasis treatment, Zenapx, did not prolong the time to recurrence of psoriasis. Then this morning, Morgan Stanley upgraded the stock to "overweight" from "underweight" saying this Phase II result lifts a dark cloud over the stock and makes for an attractive entry point. Since then, the stock has traded higher to $16.50 in pre- market action.

UBS Warburg has a differing opinion and is taking a more cautious stance on PDLI and cuts their bullish price target to $20 from $40, saying the news represents PDLI's third pipeline disappointment since December and calls into question its product development capabilities.

Since December 31st, share of PDLI have plummeted nearly 54% as of last night's close.

Jeff Bailey
Senior Market Technician
Option Investor

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