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Stocks look to extend yesterday's gains when markets open for trading here in the U.S. after last night's address by President Bush warned Saddam Hussein and his sons to leave Iraq within 48- hours or be removed at a time to be determined by a U.S.-lead attack.

The Office of Homeland Security also raised its terrorist alert back up to "code orange"

S&P futures are following European bourses higher as S&P futures (sp03h) gain 6 points to 867. NASDAQ futures (nd03h) are rising 6 points to 1,080 despite an overnight caution from semiconductor equipment maker Applied Materials (NASDAQ:AMAT) $13.12. Dow futures are on the rise, gaining 63 points at 8,165.

Fair value for the S&P 500 today is $-1.03. That price will not change during the session. HL Camp & Company has their computers are set for program buying at $0.48 and set for program selling at $-2.44. Fair value for the NASDAQ-100 today is $3.18.2003

Economic data released this morning showed February housing starts slowed in the latest month as new residential construction fell 11% to the slowest pace in 10 months. The Commerce Department said that housing starts dropped to a seasonally adjusted annualized rate of 1.622 million in February, which was down from January's 1.822 million rate, and well below analysts forecast of 1.728 million. Starts of single-family homes fell about 14% to a 1.295 million pace, the lowest level since August and the biggest percentage decline in 12 years.

Meanwhile, local jurisdictions granted 1.786 million building permits, on a seasonally adjusted annualized rate, essentially unchanged from the 1.779 million in January. Building permits are one of 10 numbers that make up the index of leading economic indicators.

The figures show construction could be slowing from a very high level. However, the government cautions that its housing numbers are highly erratic from month to month. It can take up to five months for a new trend in housing starts to be established.

Over the past five months, the pace of new construction has averaged of 1.7378 million units, down from 1.775 million last month.

The figures are especially iffy in winter months, when local weather conditions can make a big impact on the number of homes started. Seasonal adjustment factors can magnify small changes.

The pace remains very high by historic standards. In all of 2002, 1.705 million new units were started, which was the highest since the mid 1970s.

Homebuilders also reported that market conditions have worsened. The March housing market index fell to 52 from 62 in February, the National Association of Homebuilders reported Monday.

The housing figures are unlikely to sway the Federal Reserve one way or the other when policymakers meet later Tuesday to consider changes in monetary policy.

With rates already at a 41-year low of 1.25% and economic decisions somewhat frozen by pre-war uncertainty, the Federal Open Market Committee is likely to signal heightened concern about the economy while keeping its target rate unchanged, economists say.

In overnight action, Applied Materials (NASDAQ:AMAT) $13.12 fell 1% in after-hours trade, but now shows a marginally higher open at $13.24 after announcing 2,000 job cuts, or 14% of its workforce, and facilities closures. Applied Materials is the largest semiconductor equipment maker.

PC maker Gateway (NYSE:GTW) $2.40, also announced 1,900 layoffs and the closing of 76 stores as part of a restructuring plan that will result in $400 million in savings annually.

Shares of Procter & Gamble (NYSE:PG) $85.50 are indicated higher at $86.00 after the company raised it quarter targets. The company also ended weeks of speculation saying it has entered into an agreement to take control of German hair care and perfume maker Wella in a deal valued at $7 billion.

Jeff Bailey

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