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Inventories rise 0.4% in July

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Lead by an increase in automobiles, business inventories rose 0.4% in July, which was above economist's forecast for a 0.2% gain and slightly above June's revised higher 0.3%.

The Commerce Department said sales were up 1.2% in July, the most in three months, led by a 1.6% rise in sales for manufacturers which was also largely attributed to increased automobile production.

Inventories at factories edged down 0.1%, but jumped 0.9% at retailers and were up 0.4% at merchant wholesalers.

Sales are up 2.2% over a year ago, while inventories have decreased -3.7% from July 2001.

The inventory-to-sales ratio fell 1.35, matching a record low hit in April of this year. The low number indicates that businesses are seeing enough demand to keep products off their warehouse shelves.

Biotech Genzyme warns again

Shares of Genzyme Corp. (NASDAQ:GENZ) $18.40 are trading down 5.9% at $17.30 after warning on Q3 revenue and earnings per share. The company says it sees EPS of $0.26-$0.28 versus previous guidance of $0.31-$0.33 versus consensus of $0.33. The company also said it sees FY02 earnings at $1.08-$1.11 versus previous guidance of $1.18-$1.23, which is well below analyst's consensus of $1.16. The revised lower expectations are mostly attributed to slower-than-expected end-user growth and the continuation of Genzyme's program to reduce wholesaler inventories.

Lehman cautious on JP Morgan

Share's of Dow component JP Morgan (NYSE:JPM) $22.04 were trading down 75-cents over Instinet after Lehman Bros. says that JPM's announcement late Friday that its $1 billion fraud claim against insurers had been dismissed appears to be a significant setback; despite the lower valuations in the banking group, Lehman sees no upside catalyst for the shares of JPM.

Stock futures dip red

Stock futures have slowly been deteriorating this morning as December S&P futures (sp02z) trade lower by 2.7 points at 888.80, NASDAQ futures (nd02z) are off 4.5 points at 925 and Dow futures (dj02z) are down 25 points at 8,285.

Fair value for the S&P 500 today is $1.50. That price will not change during the session. HL Camp & Company has their computers set for program buying at $2.50 and set for program selling at $-1.50. Fair value for the NASDAQ-100 today is $6.00.

Jeff Bailey
Senior Market Technician
Option Investor


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