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Dow Chemical leads to more cautious tone

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Stock futures were indicating for a higher open, but a warning from Dow Chemical (NYSE:DOW) $29.80 that its Q3 earnings will be about the same as earnings of $0.16 per share posted in the year- ago quarter and below consensus of $0.29 per share has set stock futures back below fair value. Dow Chemical (DOW) shares fell more than 10% to $27.00 over the New York ECNs.

Also helping a decline to stock futures was Deutsche Securities saying that recent enterprise software field checks have not been encouraging, and Deutsche expects soft results and reduced guidance yet again. The firm lowered its long-term growth estimates and does not see strong demand drivers even when the spending environment does improve. Deutsche cut estimates for SEBL, PSFT, DCTM, VAST, MANU, ITWO and VIGN.

After setting a new 52-week low yesterday on an intra-day basis and closing at a new 52-week low, shares of Cisco Systems (NASDAQ:CSCO) $10.95 fell 20 cents in pre-market trading after UBS Warburg cut Cisco's FY03-04 estimates due to recent IT weakness, Extreme Networks (NASDAQ:EXTR) preannouncement, and checks indicating weakness in Europe and Japan.

In a positive note, AmTech Research upgraded shares of National Semiconductor (NYSE:NSM) $12.09 to "buy" from "hold," saying NSM will benefit from a cyclical improvement in cell phone demand.

Currently, S&P futures (sp02z) are down 7.90 points at 846.20, NASDAQ futures (nd02z) are off 15 points at 871.50 and Dow futures (dj02z) are lower by 82 points at 7,890.

Fair value for the S&P 500 today is $0.66. That price will not change during the session. HL Camp & Company has their computers set for program buying at $1.46 and set for program selling at $-2.12. Fair value for the NASDAQ-100 today is $3.22.

Jeff Bailey

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