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Boeing has Dow Industrials posting gains

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In what was expected to be a rather lackluster trading session this election day and one day ahead of the Federal Open Market Committee decision on interest rates.

Dow component Boeing (NYSE:BA) $31.65 +6.6% has added some spice to the Dow Industrials (INDU) 8,647 +0.8%.

Early this morning, Boeing (BA) announced it closed a deal to lease modified 767 jetliners to the U.S. Air Force for $17 billion, which was far less than the original $26 billion estimated price that drew criticism from senior legislators and the Bush administration's top number-crunchers.

According to the terms of the deal, the Air Force would lease 100 of the Boeing aircraft, specially tailored to do in-flight refueling for military aircraft.

In other Boeing-related news, Boeing said it expects China to buy 1,912 new aircraft in the next 20 years as the country grows to become the world's second-largest aviation market after the United States.

Aircraft purchases in the 2001-2002 period will be worth a total of $165 billion, is what Boeing forecasted at the China International Aviation & Aerospace Exhibition in Zhuhai. Boeing currently has 393 jets in service in China, which it says gives it a 65% share of the country's 605-plane passenger airliner fleet.

Boeing expects most of China's aircraft purchases will go to expanding the country's fleet rather than replacing old aircraft. Boeing believes the number of jet airplanes in service will rise from 636 today to 2,320 in 2021.

Other Dow gainers have SBC Communications (NYSE:SBC) $28.75 +3.12% showing gains, while General Motors (NYSE:GM) $34.77 +2.65% and Home Depot (NYSE:HD) $27.99 +2.8% reverse some of yesterday's losses.

Dow weakness is found in technology components Hewlett Packard (NYSE:HPQ) $17.22 -2.7%, IBM (NYSE:IBM) $81.36 -1.3%, Intel (NASDAQ:INTC) and Microsoft (NASDAQ:MSFT) $55.97 -0.23%.

While some of the Dow's technology components are marginally lower, the same is true for the broader NASDAQ Composite (COMPX) 1,394 -0.16% and NASDAQ-100 Index (NDX.X) 1,044 -0.25% with sector weakness found in the Semiconductor Index (SOX.X) 318 -2.31% after this morning's comments from Lehman Brothers and lofty valuations in the semiconductor equipment group. Semiconductor equipment giant Applied Materials (NASDAQ:AMAT) $15.87 -3.52% trades lower after Lehman's call, and yesterday's news that the company will reduce headcount by approximately 11%, or 1,750 positions.

Technology sector strength is found in the Biotechnology Index (BTK.X) 362 +1% with bellwether Amgen (NASDAQ:AMGN) $49.93 +3.2% once again challenging the $50 level and Networking Index (NWX.X) 131 +1% posts gains after Soundview's recent survey suggests that there is pent-up demand and high probability that 2003 will be a positive inflection point for renewed IT spending.

Jeff Bailey

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