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January durable goods has futures edging higher

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The Commerce Department reported U.S. durable goods orders rose 3.3% in January, as a jump in demand for communications equipment and automobiles helped to boost orders higher than economists forecast for a 1.0% gain. Big-ticket orders fell 0.4% in December. New orders excluding transportation were up 2.5%, while orders outside of defense were up 3.6%. The key non- defense capital goods component of this report showed a 2.1% rise in January on the heels of a 2.4% increase a month earlier.

Communications equipment jumped more than 46% last month, the government reported. It was the largest jump for this category since October. Transportation products were up 5.1% led by a 10.7% jump in orders for autos.

In a separate report, the Labor Department said that weekly jobless claims rose to a 10-week high, showing softness as claims rose by 11,000 to 417,000 in the latest week. This has the four- week average rising to 399,750, which is a seven week high. Continuing claims rose 20,000 to 3.36 million, a five week high.

This morning's economic data received a positive response from the stock futures market and had the S&P 500 futures contract (sp03h) rising from 828.50 to a morning high of 835. S&P futures currently trade higher by 5.10 points at 832.90. NASDAQ futures currently show a gain of 8.50 points at 982.50, while Dow futures are higher by 20 points at 7,830.

Fair value for the S&P 500 today is $-0.20. That price will not change during the session. HL Camp & Company has their computers set for program buying at $0.60 and set for program selling at $-1.40. Fair value for the NASDAQ-100 today is $0.83.

Treasuries have seen some modest buying turn to marginal selling and currently show unchanged levels compared to yesterday's close. The 10-year futures contract (ty03h) 116'065 +0.01% rises fractionally, with YIELD ($TNX.X) at 3.77%.

Bloomberg just reported that the Egyptian state news agency Mena said that Iraq will announce later today that it will destroy its Al Samoud-2 missiles.

In a morning call, Salomon Smith Barney said its cutting Q1 estimates on hotel stocks Hilton (NYSE:HLT) $10.95, Starwood Hotels (NYSE:HOT) and Marriot Int. (NYSE:MAR) $29.56 to reflect the increasingly large impact from war and terrorism concerns as well as bad weather. Salomon cut EPS estimates on HLT to $0.03 from $0.05 (consensus $0.05), cuts HOT to $0.01 from $0.04 (consensus $0.04), and cuts MAR to $0.34 from $0.36 (consensus $0.37).

Jeff Bailey

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