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Personal income and spending give lift to futures

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Equity futures have edged modestly higher after this morning's release of economic data that showed gains in personal income and spending for the month of December.

The Commerce Department said that personal income rose 0.4%, which was above economist's forecast for incomes to rise 0.2% and slightly above November's 0.3% rise.

As personal incomes rose, consumers also spent. Spending was spurred by automobile dealerships 0% financing incentives as purchases for durable goods, which includes cars and parts, jumped 6.5% in December. The Commerce Department said total personal spending jumped 0.9%, the most since a 1.1% rise last July, and above economist's forecast for a 0.7% gain.

The news had marginal impact on stock futures, but did see stock futures add to gains. S&P futures (sp03h) current trade 4.1 points higher at 844.10. NASDAQ futures (nd03h) are gaining 3 points to 990, while Dow futures (dj03h) are 40-points higher at 7,940.

Current futures levels have traders looking at a modestly higher open for stocks as 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 $0.24 and set for selling at $-2.52. Fair value for the NASDAQ-100 today is $1.60.

Shares of Dow component Walt Disney Company (NYSE:DIS) $16.35 are gaining $0.80, or 4.8% after the company reported first quarter earnings (December) of $0.17, which was 2-cents better than consensus estimates. Disney officials said revenues rose 6.4% year-over-year to $7.47 billion, which was slightly ahead of estimates for $7.40 billion. Disney's quarterly earning of $0.17 per share excluded a 4-cent per share charge as it took a $114 million write-down on its leases with United Airlines (NYSE:UAL) $1.07.

Also getting a boost this morning is Dow component Boeing (NYSE:BA) $30.66 to $31.70 over the New York ECNs after Irish discount airline Ryanair (NASDAQ:RYAAY) $39.55 announced orders for 100 new Boeing jets, bringing its firm orders to a total of 125 with options for 125 more.

The orders from RYAAY have helped offset some cautious comments from the brokers on Boeing's December quarter and 2003 outlook, detailed in a conference call Thursday. Including a gain, Boeing's earnings totaled $590 million, or 73 cents a share, up from $100 million, or 12 cents, earned in the year-ago period.

J.P. Morgan Securities lowered its 2003 earnings per share estimate for Boeing to $1.90 from $2.15, largely due to the "lower than expected margin guidance for the defense business."

The broker expects Boeing will deliver 265 aircraft in 2003 and 240 aircraft in 2004, and added, "We believe that management's guidance of 280 and 275-300 does not adequately reflect the risk of a war in Iraq or future airline bankruptcies or terrorist attacks."

I can't type fast enough. Semiconductor-equipment giant Applied Materials (NASDAQ:AMAT) $12.95 has just warned on upcoming quarterly earnings and stock as dropped $1.00, or 7.7% and turned equity futures into the red, with S&P futures (sp03h) falling into marginally red territory. More details to follow.

Jeff Bailey

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