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Jail break by bulls at the open

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Stock futures are surging higher this morning after Dow component IBM posted earnings late yesterday that beat estimates by 3 cents and was followed with broker upgrades at Merrill Lynch and Bear Stearns. Shares of IBM are jumping by more than $7.00 over the New York ECNs to $72.78, which is 12% above yesterday's close.

Stock futures built onto their early morning gains after the release of economic data which showed housing starts soaring 13.3% to 1.843 million, well above the consensus of 1.64 and the best reading since 1986. Economists note that housing starts may have been helped by mild September weather. However, building permits were also very strong, rising 3.7% and suggesting underlying strength in housing.

Stock futures didn't seem to blink an eye at this week's jobless claims which rose by 22K to 411K, which was higher than the 398K consensus and reversing last week's decline to 384,000. The four-week average dropped by 5K to 409K, the lowest since August.

In other earning's reports this morning, retailer Sears (NYSE:S) $33.95 reported Q3 earnings that missed estimates by $0.23 a share. Shares of S were hit lower at $28.50 over the ECNs.

Dow components Eastman Kodak (NYSE:EK) $30.35 jolted higher to $34.00 in pre-market action (+12% from yesterday's close) after raising its Q3 outlook to $1.04 and Q4 outlook to a range of $0.60-$0.70. Both were higher than consensus of $0.73 and $0.66 respectively. EK said it higher guidance is due to being surprised by the increased productivity across the company's business units.

EMC Corp (NYSE:EMC) $4.76 edged down 17-cents to $4.60 over the ECNs after reporting a Q3 loss of $0.02 per share, which was in line with consensus. The company said revenues rose 3.9% year- over-year to $1.26 billion versus the $1.25 billion consensus.

All of the above has Treasuries seeing a strong round of selling again today with the benchmark 10-year YIELD ($TNX.X) rising to 4.169% as this bond's December futures (ty02z) falls 0.61% to 112'135.

Stock futures have the S&P futures (sp02z) gaining 24.50 to 886.80, NASDAQ futures (nd02z) higher by 31.50 at 951 and Dow futures (dj02z) surging 232 points at 8,270.

Fair value for the S&P 500 today is $0.36. That price will not change during the session. HL Camp & Company has their computers set for program buying at $2.02 and set for program selling at $-1.48. Fair value for the NASDAQ-100 today is $2.54.

Jeff Bailey

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