Option Investor
Market Updates

Stocks futures gain as tensions calm

Printer friendly version

Stock traders are looking at a higher open after U.S. and Pakistanti officials over the weekend announced the capture of the third-ranking officer in the al-Qaeda terror network and self-confessed planner of the Sept. 11 attacks.

Also, U.N. inspectors confirmed Saturday that Iraq began complying with a mandate by destroying four Al Samoud 2 missiles, setting a timetable for further dismantling.

S&P futures (sp03h) are gaining 7.10 points to 848, NASDAQ futures (nd03h) are higher by 7.00 points at 1,107.50, while Dow futures (dj03h) are up 35 points at 7,955.

Fair value for the S&P 500 today is $-0.18. HL Camp & Company has their computers set for program buying at $0.66 and set for program selling at $-1.66. Fair value for the NASDAQ-100 today is $0.84.

Treasuries are seeing fractional selling across the major maturities this morning with the March 10-year Treasury futures (ty03h) $116'215 -0.03% lower, while the benchmark bond's YIELD ($TNX.X) edges up at 3.697%, from Friday's closing YIELD of 3.696%.

In this weekend's Ask the Analyst column, we address a trader's question regarding a "triangle" formation developing in the S&P 500 (SPX.X), and there looks to be some similarity in various indicators as that found in April of 2001. Traders and investors might find that article helpful in coming sessions.

Economic data released this morning showed consumers were frugal in January as personal spending rose a modest 0.3%, which was slightly above economist's forecast for a 0.2% increase. Nominal spending (inflation adjusted dollars) fell 0.1% and was just the second time in the past 14 months that inflation-adjusted spending had declined.

Meanwhile, incomes rose 0.3%, which was slightly below forecast for a 0.4% gain, while real disposable incomes grew 0.2% in January.

In December, real spending rose 0.9%. Incomes grew a revised 0.3%, while real disposable incomes increased a revised 0.3%.

Consumer spending remains a key variable in the economic outlook. Policymakers are counting on consumer spending to remain healthy until business spending can fully revive. However, income growth has been slowing. Spending increases have been sporadic, with consumers preferring to save or pay down debt unless they see a good bargain.

In January, the personal savings rate rose to 4.3% from 3.9%.

Shares of Intel (NASDAQ:INTC) $17.26 are edging lower by 11 cents at $17.15 and hold this morning's top spot among most actively traded in the pre-market.

Analysts continue to weigh in ahead of the chipmaker's key march 6 update to the markets on its March quarter. Something of a consensus appears to be emerging that Intel will tighten its forecast for sales for March by bringing up the lower end of its estimate range.

Merrill Lynch, SG Cowen and UBS Warburg each commented on expectations for March 6, with Warburg saying it sees Intel likely "to maintain the original guidance for the March quarter of $6.5-7.0 billion or slightly increase the bottom end of the range, effectively increasing the midpoint of revenue guidance to $6.80 billion from $6.75 billion. Merrill expects the mid-point to remain unchanged at $6.75 billion.

SG Cowen said it anticipates "Intel may slightly raise the low end of its revenue guidance range." The broker is expecting $6.85 billion in first quarter revenue, down 4% from the December quarter.

"Visibility remains very limited, however, and with Intel's returns and growth rates below historic levels, and valuations above historical levels, we believe the upside in the stock is limited until there are clear signs of a major corporate PC upgrade cycle," SG Cowen added.

In early chip news, worldwide sales of semiconductors totaled $12.2 billion in January, down 2.4 percent from December, but up 22 percent from the same period a year ago, according to the Semiconductor Industry Association (SIA).

The chip industry tracker said it projects "double-digit" percentage sales growth in 2003, helped by a recovery in information technology spending, continued strength in the wireless market and the emergence of new sectors such as broadband networks. SIA said IT spending is forecasted to increase 4 to 7% in 2003 and PC sales are expected to rise 10 to 14%.

Jeff Bailey

Intraday Update Archives