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Jobless claims have stock futures recovering

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This morning's report from the Labor Department shows that jobless claims for the week ended July 13 fell by 28,000 to a seasonally adjusted 379,000, which was better than (below) the 393,000 expected by economists. Today's report has initial jobless claims at an 18-month low.

The four-week average of initial claims dropped by 4,750 to 391,000, the lowest level since early March.

A Labor Department spokesman cautioned not to make too much of the decline this week, just as the Labor Department did with last week's rise for initial claims as annual furloughs in the auto and textile sectors can lead to wide swings in the data that aren't fully adjusted by the seasonal factors and which don't relate to underlying trends in the labor market.

Meanwhile, continuing claims for state unemployment benefits continued to rise. For the week ended July 6, benefits rose by 1,000 to 3.59 million, following large declines in the three previous weeks. The four-week average of continuing claims fell to 3.63 million, the lowest since March.

This morning's jobless claims number did see stock futures recovering from their morning lows as S&P futures now trade up 4 points to 909, NASDAQ futures are lower by 4 points at 1,029.50, while Dow futures gain 40 points to 8,565.

Stocks look to open marginally higher as fair value for the S&P 500 today is $0.95. That price will not change during the session. HL Camp & Company has their computers set for program buying at $2.35 and set for program selling at $-1.85. Fair value for the NASDAQ-100 today is $3.40.

Earnings versus estimates released this morning

The following is a brief list of company's that released earnings this morning. Company name, symbol, yesterday's close, reported earnings and analyst's estimate as polled by Multex and industry group.

Allstate (ALL) $34.08, $0.22 / $0.21 (insurance)
Biogen (BGEN) $35.05, $0.31a / $0.31 (biotech)
Boise Cascade (BCC) $29.85, $-0.07a / $-0.06 (forest/paper)
DaimlerChrysler (DCX) $46.70, $1.19a / $0.75 (auto)
Delta Airlines (DAL) $16.45, $-1.34a / $-1.36 (aero)
Diamond Offshore (DO) $25.20, $0.09 / $0.08 (oil service)
Georgia Pacific (GA) $23.25, $0.45 / $0.44 (forest/paper)
Intl. Paper (IP) $40.20, $0.35 / $0.20 (forest/paper)
Lockheed Martin (LMT) $60.00, $0.58a / $0.57 (aero/defense)
Philip Morris (MO) $44.12, $1.24a / $1.24 (consumer)
Sears Roebuck (S) $44.33, $1.31 / $1.13 (retail)
Sprint FON (FON) $11.70, $0.36a / $0.33 (telecom)
United Healthcare (UNH) $92.50, $1.01 / $0.95 (healthcare)

"Meaningful" upside looks to be DCX, IP, S and UNH.

Note: Reported earnings with an "a" denotes earnings that exclude one-time charges so that the actuals are comparable to the estimates, which also exclude charges.

Jeff Bailey
Senior Market Technician
Option Investor

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