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Consumer prices rose 0.5% in April

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Prices at the consumer level rose 0.5% in April, which slightly surpassed the 0.4% rate economists had expected. Excluding the volatile food and energy components, the core rate edged up 0.3%, which was also slightly higher than the 0.2% forecast.

During the first four months of 2002, the CPI rose at a 3.8% seasonally adjusted rate, compared with an increase of 1.6% for all of 2001. Since April of 2001, CPI has risen 1.6% overall, but has jumped 2.5% when food an energy are excluded.

The energy category experienced the largest increase in prices, rising 4.5%. Gasoline accounted for most of the higher prices in this category, soaring 10.1%.

Housing prices rose 0.3%, with a 0.4% increase in shelter costs, which include rent and hotel fees.

Transportation saw a 1.7% rise, mostly accounted for by airline fares, which jumped 0.9%.

Inventories decline 0.3%

U.S. businesses continued to cut their inventory in March for the 14th straight month.

The Commerce Department reported that inventories fell 0.3% while sales of all businesses rose 0.3% in March. The inventory-to- sales ratio fell to 1.28, tying a record low in a series that's been in a long-run decline.

Inventories fell to $1.12 trillion, the lowest level since October 1999. Inventories are down 5.9% in the past 12 months.

Today's reported 0.3% inventory decline was slightly lower than economists' forecast for a 0.2% decline.

Industrial production and capacity utilization later

Later today, traders and investors will get yet another set of economic numbers that could have an impact on trading. Economists are looking for April industrial production to rise 0.4% after a 0.7% gain in March. Capacity utilization is expected to be at the 75.6% level, marking a slight increase from March's 75.4%.

Stock futures lower

Stock futures are lower this morning with S&P futures down 5.4 points at 1,093.10. NASDAQ futures are down 17.50 points at 1,295 and Dow futures are down 51.00 at 10,240.

Fair value for the S&P 500 today is $0.28. That price will not change during the session. HL Camp & Company has their computers set for program buying at $1.32 and set for selling at $-0.90. Fair value for the NASDAQ-100 today is $2.80.

Jeff Bailey
Senior Market Technician
Option Investor

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