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US/UK discuss change to recently proposed resolution

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Stock futures have recovered from their morning lows to show fractional gains after morning news that the U.S. and U.K. began discussing changes to their UN resolution authorizing war with Iraq in order to line up more votes from undecided countries.

The move follows veto threats from France and Russia, as well as Pakistan's announcement that it will abstain from any vote on Iraq. The U.S. insisted that Hans Blix address the Security Council today to answer questions about drones, cluster bombs, and other evidence of Iraqi violations the US says were outlined in his written report, but which weren't included in his oral report. The US has also rejected Iran's claim that its nuclear program is strictly for energy production.

The latest New York Times/CBS News Poll shows that Americans are growing impatient with the UN and say they would support military action against Iraq even if the Security Council refuses to support an invasion.

Thought that the U.S. and U.K. were willing to discuss and perhaps "fine tune" their recently proposed March 17th deadline on Iraq gave a morning lift to stock futures that were trading marginally lower, and now has S&P futures (sp03h) 808.80 edging up 1 point. NASDAQ futures (nd03h) are unchanged at 966.50, while Dow futures (dj03h) are higher by 25 points at 7,585.

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 $0.86 and set for program selling at $-1.82.

Later this morning at 10:00 AM EST, traders will get some economic data to digest in the form of January wholesale inventories. Economists have forecasted a 0.2% rise.

Shares of Nokia (NYSE:NOK) finished their trading session in the U.S. at $12.67 yesterday, but fell 6% in European trade after the company warned of weaker than expected Q1 sales and earnings. The company guided to a range of euro 0.15 and 0.17, which was lower than guidance issued in January of euro 0.15 to 0.19. The company said it sees Q1 mobile phone sales at the low end of the guided range of flat to 9% year-over-year growth. NOK also warned that its Nokia Networks will post a substantial pro forma operating loss for the quarter, impacted by lower-than-expected sales volumes of its equipment as well as costs related to the first phase implementation of third generation technologies.

Weighing on technology and perhaps NASDAQ futures this morning was a report by the Financial Times that had the Gartner Europe survey indicating European IT spending is unlikely to grow in 2003 and may even decline slightly with slow growth only beginning in 2004. Although research showed marginal growth in 2003 budgets, companies are expected to transfer unspent IT money to other areas of its operations, ending the traditional Q4 "budget flush" where unused money is spent to protect budget levels for the following year. The trend in Europe is thought to reflect global patterns as well.

Jeff Bailey

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