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Stock futures drift lower

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Stock futures are drifting lower this morning as S&P futures (sp02u) trade down 3.50 at 890.20. NASDAQ futures (nd02u) are pulling back 4.5 points at 957 and Dow futures are lower by 45 points at 8,620.

Fair value for the S&P 500 today is $0.80. That price will not change during the session. HL Camp & Company has their computers set for program buying at $1.99 and set for selling at $-1.89. Fair value for the NASDAQ-100 today is $3.00.

Despite the weakness in equity futures, Treasuries are seeing modest selling at the 5-year ($FVX.X) 3.59%, 10-year ($TNX.X) 4.56% and 30-year ($TYX.X) 5.41% maturities. The 13-week YIELD ($IRX.X) 1.677% is unchanged.

The dollar is modestly lower this morning after a recent rebound from its recent 52-week low. The U.S. Dollar Index (dx00y) 106.79 -0.28% has the dollar lower against a basket of 7 market weighted currencies.

Shares of Citigroup (NYSE:C) $33.31, is lower by about 1% at $33 as sentiment toward the big banks sinks a bit this morning after some tough talk out of Washington toward company executives that mislead or help mislead investors as it relates to corporate accounting or fiscal dealings. Merrill Lynch (NYSE:MER) $36.25 is likely to come into focus in today's trading as the New York Times and the Financial times raise concerns the broker eased out an Enron-skeptical analyst.

Energy concern Dynegy (NYSE:DYN) $1.55 reported aQ2 earnings loss this morning of 1-cent a share, which was 2-cents below consensus. Dynegy (DYN) also revised 2002 recurring EPS guidance range of $2.00-$2.05 to approximately $0.41 (consensus was $0.89), based on the assumption that results for the balance of the year are breakeven. The revised guidance reflects new capital and liquidity initiatives and takes into account lower commodity prices, reduced liquidity levels and weaker energy industry fundamentals.

Later this morning at 10:00 AM EST, look for preliminary July Consumer Confidence numbers. Economists are looking for a reading of 102.3 versus June's 106.4. Many economists will note that consumer confidence has ties to how the stock market has been performing and up until the past couple of days, the markets have really taken a hit to the downside, and most likely Consumer Confidence will have also taken a hit in July. I'm thinking it will take a reading outside the range of 100-103 to get much of a surprised response from the MARKET.

Jeff Bailey
Senior Market Technician
Option Investor

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