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Stocks look to extend gains at open

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After breaking some levels of near-term resistance on Friday, the major indexes are looking at a higher open as S&P futures (sp03h) gain 7.3 points to 933.80, NASDAQ futures (nd03h) are higher by 15 points at 1,106.50 and Dow futures (dj03h) jump 88 points to 8,855.

Semiconductor stocks look to get a pop at the open after Salomon Smith Barney raised its estimates for Intel (NASDAQ:INTC) $17.42, saying industry data and channel checks suggest that their previous assumption of flat Q3/Q4 pricing may have been too conservative. The firm also said that checks suggest both Europe and Asia were stronger, while the U.S. was in-line, and the sales mix may have favored mobiles and servers, which helped prices. Salomon raised its Q4 revenue/EPS projections on Intel (INTC) to $7.1 billion/$0.15 from $6.95 billion/$0.14 (consensus $6.92 billion/$0.14) and 2003 EPS estimate to $0.65 from $0.60 (consensus $0.63), and raises price target to $20 from $18. Shares of Intel (INTC) rose to $17.89, or 2.6% in pre-market trading.

Also adding some bullishness to semiconductor stocks at the open is a weekend article in Barron’s saying that LSI Logic (NYSE:LSI) $6.15, which built a new facility at the peak of the market for about $1.2 billion, is up to 82% capacity utilization. The article said, “The nice thing is, since the top of the bubble in 2000, they have taken out about 35% of the cost structure of the company.” Share of LSI Logic (LSI) are gaining $0.59 to $6.74%, or 9.5% in pre-market trading.

Utilities may be under some selling pressure at the open after Duke Energy (NYSE:DUK) $21.00 is hit lower at $18.44 after reducing earnings guidance. The company now said it expects 2002 ongoing EPS to fall below previous guidance of $1.95-$2.05. Specifically, it sees EPS at about $0.10 below the low-end of the range (consensus $1.91). For 2003, the company put ongoing earnings at $1.35-$1.60 (consensus $1.84) saying the weaker results were driven primarily by continued depressed conditions in the merchant energy sector and by the sluggish economy. The company addressed their dividend by saying, “While the dividend is subject to board approval, the guidance we are providing today supports the continuation of our existing dividend of $1.10 per share annually.”

In other market news, shares of AOL Time Warner (NYSE:AOL) $14.88 are gaining $0.53 to $15.41 after Chairman Steve Case announced that he will step down as Chairman of AOL in May at the shareholder meeting. Case sited the possibility that shareholder criticism of him will be a distraction to the company. Mr. Case said he will remain as a Director and co-Chair of the Strategy Committee.

Fair value for the S&P 500 today is $0.18. 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 $-1.76. Fair value for the NASDAQ-100 today is $2.60.

Jeff Bailey

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