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November durable goods fall 1.4%

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Weaker demand for industrials metals, machinery and cars, had durable goods orders in November falling 1.4%, which was well below economist's expectations for a slight 0.8% rise.

Defense goods prevented the drop from being worse. Without military orders, durable goods orders fell 2.3%. Without transportation orders, durable goods demand was about the same, down 1.3%.

Orders for capital goods excluding those ordered by the Pentagon fell 3.2% in November, after a 4.8% increase a month earlier. The sector has shown much volatility as it fell more than 10% in September and has yet to show consistent sustainable gains, although is improved from the worst months of the recession. Orders for defense capital goods jumped nearly 29% last month.

In the transportation sector, orders for motor vehicles and parts fell 4.5%, pushing overall transportation equipment orders down 1.6%.

Primary metals orders fell 4.6%. Machinery orders were off 3.2%. Electrical equipment and appliance orders edged down 0.6%.

The only categories to show improvement were computers and electronics, up 0.3%, and for communications equipment, which rose 1.4% and built on a sizable gain in October.

Meanwhile, shipments slumped 1.3% in November. Unfilled orders were down 0.9% and inventories were cut back another 0.2%.

Stock futures had been near unchanged levels prior to this morning's durable goods orders, but fell to their morning lows and have started to edge up off those lows.

S&P futures (sp03h) are currently off just 2.3 points at 894.80, NASDAQ futures (nd03h) are down 4 points at 1,029.50 and Dow futures (dj03h) are lower by 40 points at 8,450.

Fair value for the S&P 500 today is $0.06. That price will not change during the session. HL Camp & Company has their computers set for program buying at $0.42 and set for program selling at $-2.36. Our fair value for the NASDAQ-100 today is $3.68.

Shares of Sun Microsystems (NASDAQ:SUNW) $2.96 are jumping 14% to $3.40 in pre-market after a U.S. District Court Judge handed SUNW a strategic victory in it private antitrust lawsuit against arch rival Microsoft (NASDAQ:MSFT) $53.99. Early comments from industry analysts were tempered by a consistent view that the financial impact for both companies is probably small. Shares of Microsoft (MSFT) slipped 34-cents to $53.69 on the news.

Amgen (NASDAQ:AMGN) $51.54 is gaining $1.24 to $52.78 after the biotech company announced it and Wyeth Pharmaceuticals, a division of Wyeth (NYSE:WYE) $37.85 received Food and Drug Administration approval for Amgen's Rhode Island manufacturing facility for Enbrel.

Traders should remember that today's session is a shortened one, with trading ending at 01:00 PM EST. Markets will be closed on Wednesday for the Christmas holiday.

Jeff Bailey

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