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Durable goods orders rose a marginal 0.2%

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Economic data releases this morning show durable goods orders rose a modest 0.2% in December, which was slightly below economist's forecast for a 1.0% gain. However, excluding the more volatile transportation component, durable goods rose 1.1%.

When the transportation components of the durable goods data was further dissected it becomes apparent that the bulk of the weakness from transport components wasn't necessarily from aircraft. Nondefense capital goods orders rose 2.8%, but fell 0.1% when aircraft are excluded.

This morning's durable goods data, combined with past reports does have this measure of investment recovering from its steep recession declines, but has yet to show clear signs of any sustained growth and still depicts a sluggish economic recovery.

Stock futures were little changed on the release of this morning durable goods orders, but have been edging higher after their release. S&P futures (sp03h) currently trade higher by 4.9 points at 852.20, NASDAQ futures (nd03h) are gaining 10.5 points at 999, while Dow futures (dj03h) edge higher by 12 points at 7,995.

Fair value for the S&P 500 today is $0.10. That price will not change during the session. HL Camp & Company has their computers set for program buying at $0.26 and set for program selling at $-2.62. Fair value for the NASDAQ-100 today is $1.76.

Dow component and drug bellwether Merck (NYSE:MRK) $51.76 is seeing upside action at $52.60 over the New York ECN after reported Q4 earnings of $0.83 per share, which was inline with consensus estimates. The company said revenues rose 10.8% year- over-year to $13.92 billion, which was just ahead of analyst's estimates of $13.58 billion. The company gave guidance for full 2003 EPS of $3.40-$3.47 which was above current consensus of $3.39.

Shares of Biogen (NASDAQ:BGEN) $36.12 are being hit lower at $34.66 after the company reported in line Q4 EPS, but guided its upcoming Q1 to $0.30-$0.38 per share, which was below analyst's estimates for EPS of $0.40. The company also gave guidance for 2003 EPS of $1.63-$1.78 versus consensus estimates for $1.69.

Treasuries, which witnessed selling in yesterday's session, are seeing some follow through selling this morning across the major maturities. The 10-year March futures contract (ty03h) $114'040 -0.15% has the benchmark bond's YIELD ($TNX.X) rising to 3.983% and currently testing a flat 21-day SMA of 4%.

Jeff Bailey

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