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Investors brace for lower open

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Stocks are set to open lower as S&P futures (sp02z) are down 11 points at 913.0, NASDAQ futures (nd02z) decline by 20.50 points at 1,074 and Dow futures (dj02z) fall 90 points at 8,675.

Helping the move lower this morning is Morgan Stanley lowering their views on the semiconductor capital equipment sector to "in- line" from "attractive" based on their outlook for a muted cyclical recovery in 2003 as well as valuations being at uncomfortable levels. While downgrading the sector, the firm still raised its price targets on AMAT, CYMI, KLAC, NVLS and TER, and removed targets on ACLS, DPMI, HELX, KLIC, LRCX, LTXX, PLAB and VSEA.

After reporting earnings that beat the Street's estimates, software maker JD Edwards (NASDAQ:JDEC) $14.22 was hammered lower in after-hours trading and extends the decline lower at $11.85 this morning after it warned that upcoming Q1 would be flat and at the low end of expectations, with the company seeing first quarter earnings of $0.03 versus consensus estimates of $0.04.

Federated Department Stores (NYSE:FD) $31.98 said that better- than-expected Thanksgiving sales was not enough to offset weakness in early November and now sees November-December holiday sales at the lower end of it prior guidance of flat to down 2.5%. This new had shares of FD falling to $31.20 in the pre-market, down 2.4% from yesterday's close.

In economic news, Q3 productivity growth was revised higher to 5.1% from 4.0%. This was a stronger than expected 4.5% upward revision, but not a significant surprise given a healthy upward revision to Q3 GDP growth.

Fair value for the S&P 500 today is $0.08. That price will not change during the session. HL Camp & Company has their computers set for program buying at $0.90 and set for program selling at $-1.64. Fair value for the NASDAQ-100 today is $0.85.

Jeff Bailey

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