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War with Iraq begins

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Roughly 90-minutes after President Bush’s deadline for Saddam Hussein to vacate Iraq had passed, the United States launched approximately 40 cruise missiles from U.S war ships, in what was described as an attempt to target buildings in Baghdad where Saddam Hussein was thought to have occupied.

At time of first strike, S&P futures (sp03m) dipped lower from 878.20 to a low of 870.50 over the course of approximately 30- minutes, but then recovered back to the 878 level soon after, as it appeared that the “first strike” that marks the beginning of a war effort with Iraq, was a strategic strike targeted at Saddam Hussein and key Iraqi military operations, but a strike that marks the beginning of war with Iraq.

Hours after the first strike on Iraq, Saddam Hussein appeared in a televised address and urged citizens to “go draw your sword and not be afraid.”

Iraq retaliated, firing two missiles toward Kuwait's northern border with Iraq, the official Kuwait News Agency reported. The attack set off warning sirens in Kuwait City. U.S. officials said one of the missiles disintegrated in flight, while the other missile was successfully intercepted by a Patriot missile.

While war reports will most likely be today’s focus among traders, economic data released this morning shows weekly jobless claims fell by 4,000 to 421,000, as the prior week’s jobless claims were revised upward by 5,000 to 425,000 (initial report was 420,000). Today’s release of weekly jobless claims was worse than economists forecast of 415,000.

Later today at 10:00 AM EST, February leading indicators will be released. Economists forecast is for a –0.4% decline. At 12:00 PM EST, the Philadelphia Fed will release its March data, which is expected to show a decline of –1.0, compared to February’s +2.0. Then at 02:00 PM EST, the Treasury will release its February budget with expectations of a -$98 billion deficit. The FOMC will also release its official minutes from Tuesday’s meeting.

With war events taken into account and this morning’s economic data, traders are looking at a lower open for stocks as S&P futures (sp03m) currently trade down 5 points at 867.70. NASDAQ futures (nd03m) are lower by 8 points at 1,068 and Dow futures (dj03m) are down 55 points at 8,185.

Fair value for the S&P 500 today is -$0.93. That price will not change during the session. HL Camp & Company has their computers set for program buying at $0.42 and set for program selling at -$2.04. Fair value for the NASDAQ-100 today is $3.25.

Jeff Bailey

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