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ECB rate cut and jobless claims have stocks higher

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Stock traders are looking at a higher open this morning after the European Central Bank (ECB) cut is key lending rate by a half point and had overseas equity market higher, which has carried over to the U.S. stock futures markets.

Gains in and around Europe find Frances CAC 40 gaining 2.1% to 3,267, Germany's DAX advanced 1.47% to 3,369 while the U.K.'s FTSE 100 rose 1.13% to 4,094.

Here at home, the Labor Department said initial jobless claims fell by 13,000 to 355,000 in the latest week that ended last Saturday, marking the fewest filings for jobless claims since the week ended February 17, 2001. The decline was better than economist's forecast for a jobless claims rise to 374,000. The Labor Department cautioned that the Thanksgiving holiday will often skew the weekly jobless claims numbers as employers tend to make few adjustments to payroll around the holiday.

Still, the four-week average, which tends to smooth out the weekly volatility declined to 376,500 from 387,00, and further below the key 400,000 level that economists will benchmark from, giving hope that layoffs are abating and the labor market continues to show stabilization.

Stocks in the news have number two commercial airliner UAL Corp. (NYSE:UAL) $3.13 being cut in half at $1.40 in this morning's pre-market after trading as low as $1.00 late last night after the U.S. government rejected the airlines $1.8 billion loan guarantee. The news has many believing that Chapter 11 bankruptcy becomes the company's only alternative as debt payments come due. Even if bankruptcy court is United's next step, the company indicated it will continue to fly its normal schedule, as recently bankrupted US Airways has done since filing for bankruptcy protection in August.

Biotech Milennium Pharmaceuticals (NASDAQ:MLNM) $10.81 is gaining 13.7% to $12.30 in the pre-market after saying it intends to file a New Drug Apllication with the FDA to market Velcade as a treatment for relapsed and refractory multiple myeloma by early 2003. Earlier this year, Velcade was granted fast-track status by the FDA.

All of the above finds Treasuries seeing selling this morning with YIELDS higher across the major maturities. The benchmark 10-year YIELD ($TNX.X) is rising to currently YIELD 4.228% in the early morning trade.

Equity futures are higher with S&P futures (sp02z) gaining 5 points to 924, NASDAQ futures (nd02z) are up 16.5 points at 1,087.50, while Dow futures rise 47 points at 8,790.

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 $1.56 and set for selling at $-1.31. Fair value for the NASDAQ-100 today is $0.80.

Jeff Bailey

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