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Stock futures slip after durable goods data

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Stock futures are mixed to lower after this morning's release of February durable goods data. This morning's data shows that durable goods orders rose 1.5% in February, which was slightly better than economist's forecast of 1.1%, but order fell -1.3% excluding the volatile transportation component and that appears to have futures slipping back from earlier gains.

Transportation equipment, let by aircraft and parts, surged 8.6% last month, including a more than 47% jump in orders for commercial aircraft. Demand for computers and electronics, fell for the first time since September, decreasing 2.4%.

Inventories fell for a 13th straight month in February, while capital goods ex-defense inventories have also been reduced each month for over a year.

S&P futures have edged back to unchanged levels at 1,137.70, while NASDAQ futures have slipped into negative territory and trade down 3 point at 1,433. Dow futures are trading up 11 point at 10,308.

Fair value for the S&P 500 today is $2.35. HL Camp & Company has their computers set for program buying at $3.65 and set for selling at $1.25.

Bond traders are buying bonds this morning as YIELDS in the 5, 10 and 30-year are all lower. The benchmark 10-year YIELD ($TNX.X) currently YIELDS 5.334%, as price rises 15/32 in early morning trading.. I'm looking for YIELD support to be rather firm at the 5.0% level on any pullback.

Stocks in the news

Late yesterday, Shell Oil (UK:SHEL) said it has reached a definitive agreement to pay $22 a share in cash for Pennzoil (NYSE:PZL) $15.49, for a total equity value of $1.8 billion. Shell Oil (UK:SHEL) is a division of The Royal Dutch Shell Group (NYSE:RD) $52.80.

Network Associates (NYSE:NET) $25.00 said that the U.S. Securities and Exchange Commission "SEC" has begun a formal order of private investigation into the company's fiscal 2000 accounting practices. The network security company said it reviewed its accounting for that period with outside auditors and felt its practices were proper. The company also said it would delay the start of its proposed share exchange offer for McAfee.com (NASDAQ:MCAF) $18.51, which saw its shares drop to $14.00 (-24%) in pre-market action.

Gerard Klauer Mattison lowered its rating on Applied Materials (NASDAQ:AMAT) $51.28 to a "neutral" from a "buy" on belief that an improvement in capital equipment orders is already reflected in the company's current share price. Shares of AMAT slipped to $50.89 (-0.7%) in pre-market action.

Jeff Bailey
Senior Market Technician
Option Investor

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