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Rumors drive futures once again

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The U.S. equity cash markets don't open for trading until 09:30 AM EST, but stock futures have seen a rather volatile morning session as rumors surfaced at approximately 08:00 AM EST, which lifted S&P futures from their lows of 792 to as high as 805, after rumors were circulated that terrorist Osama Bin Laden had been caught. The Central Intelligence Agency (CIA) has quickly denied these reports, which were picked up from Iranian radio.

At 08:30 AM EST, the Commerce Department reported that the U.S. January trade deficit fell to $41.1 billion, from the revised upward and record high of $44.9 billion in December. Exports rose 1.6% as imports fell 2% despite a surge in petroleum import prices. The $41.1 billion deficit was lower than economists forecast of $43.5 billion.

Treasuries are seeing a mixed trade this morning with marginal selling in the shorter-dated bonds and buying in the longer-dated maturities. The 5-year Note's YIELD ($FVX.X) is edging up at 2.518%, which is just shy of its October low YIELD of 2.533%, while the 10-year Treasury YIELD ($TNX.X) 3.572% and 30-year Treasury YIELD ($TYX.X) 4.629% are hovering right at their October low YIELD levels. The March 10-year Treasure futures contract (ty03h) $117'195 +0.01% is '005, or 0.01%.

Stock futures have since settle down after the Osama Bin Laden rumors and currently have S&P futures (sp03h) trading down 3 points at 797.20. NASDAQ futures (nd03h) are lower by 4 points at 954, but well off their lows of 946. Dow futures (dj03h) are currently down 35 points at 7,485.

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 $0.94 and set for program selling at $-1.32. Fair value for the NASDAQ-100 today is $0.50.

HL Camp & Company reports that one of the stocks weighted on the buy side when programs are triggered in the S&P 100 is Texas Instruments (NYSE:TXN) $16.37, while one stock weighted on the sell side is General Dynamics (NYSE:GD) $53.30. Camp also reports there are 7 buy weighted stocks and 14 stocks weighted for selling.

Shares of programmable chip maker Altera (NASDAQ:ALTR) $11.66 are this morning's sixth-most actively traded in pre-market action and are ticking higher at $12.15 after the raised its Q1 revenue guidance to a 4% quarter-over-quarter growth rate, which is up from prior guidance of flat to up 2%. CSFB said it is raising its firm's Q1 revenue/EPS estimates to $187.9 million/$0.08 from $180.6/$0.07, but says the stock is fully valued based on the firms previous target of $12. Altera's major competitor Xilinx (NASDAQ:XLNX) $22.18 edges up 10-cents to $22.28 in this morning's pre-market trade.

After trading a new 52-week low yesterday, Ford Motor (NYSE:F) $6.60 is getting a lift to $6.81 over the New York ECNs after UBS Warburg upgrades to "neutral" from "reduce" based on their belief that the market has become unduly pessimistic regarding the company's near-term outlook. Warburg does not agree with the view that the Ford could go bankrupt in the near future, and while long-term prospects look poor, Warburg believes that Ford does not have the balance sheet weakness to support any notion of imminent bankruptcy risk. Warburg's target is $6.50 (this is not a misprint).

Jeff Bailey

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