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Housing starts and jobless claims weaker than expected

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This morning's economic data has stock futures trading lower from earlier levels after this mornings economic data was released. Housing starts fell 5.4% in April to a 1.55 million unit rate, which was below consensus looking for a 1.63 million unit rate. Building permits rose 0.3% to 1.634 million. While the decline in housing starts is a bit negative, the increase in building permits is interpreted as a positive as it is considered a leading indicator. So far in 2002, housing starts are running about 3% ahead of 2001's pace, when 1.60 million units were started. With weather conditions no longer boosting construction data, other factors such as mortgage rates, income growth and prospects for above-market gains on residential investments are still supporting construction activity.

This morning's jobless claims number shows that jobless claims rose again last week by 2000. The advance figure for seasonally adjusted initial jobless claims for the week ending May 11 was 418,000, well above the 407,000 forecast.

Stock futures off best levels

Stock futures dipped from their best levels and now look mixed headed toward the open. S&P futures are up 1 point at 1,095.50. NASDAQ futures are down 8.5 points at 1,312, while Dow futures are higher by 5 point at 10,270.

Fair value for the S&P 500 today is $0.26. That price will not change during the trading session. HL Camp & Company has their computers set for program buying at $1.58 and set for selling at $-0.59. Fair value for the NASDAQ-100 today is $2.68.

As it stands right now, stocks look to open marginally higher based on fair value versus futures levels.

Jeff Bailey
Senior Market Technician
Option Investor

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