Option Investor
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Flat open as futures trade mixed

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After suffering their largest decline for the year on fears that the war in Iraq will extend past what some thought would be a quick war, the major indexes here in the U.S. are firm, but show a mixed open ahead.

S&P futures (sp03m) currently trade down 1.2 points at 862.30. NASDAQ futures (nd03m) are gaining 3.5 points at 1,053.50, while Dow futures (dj03m) are lower by 12 points at 8,178.

Fair value for the S&P 500 today is $-0.87. That price will not change during the session. HL Camp & Company has their computers set for program buying at $0.52 and set for program selling at $-2.68.

Overseas markets have seen a mixed trade as they near their close. In Asia/Pacific market trading, Japan's Nikkei 225 rose 134 points or 1.7% to 8,002.69, while Hong Kong's Hang Seng slipped 46 points, or -0.51% to 9,062. Moving west, European markets have France's CAC 40 down 0.13% at 2,723, Germany's DAX is gaining 0.56% at 2,562, while the United Kingdom's FTSE 100 is down 0.85% at 3,711.

The dollar remained weak as the euro held gains and crude prices also largely held. A bounce in U.S. stock futures sparked a turn for German and French market, but U.K. stocks remained lower. The U.S. Dollar Index (dx00y) is lower by 0.38 at 100.59, reflecting a weaker dollar against the basket of 7 major foreign currencies.

Early morning action from the bond market is somewhat defensive as investors look to move some cash back toward the safety of bonds. All the major maturities are seeing price gains, with buying in the shorter-dated 5-year YIELD ($FVX.X) which is falling to YIELD 2.896%. The June 5-year Treasury bond futures contract (fv03m) is gaining 5/32 to $112'190. The longer-dated 30-year June futures contract (ty03m) is up 6/32 at $113'220, with YIELD ($TYX.X) slipping back near the 4.9% level. The benchmark 10-year YIELD ($TNX.X) slipped back below the 4.0% level yesterday, and continues lower this morning at 3.982%. The 4.0% level is a level that I feel where this bond slips below, signals a more defensive posture from the market.

Later this morning at 10:00 AM EST, economic data will be released from the Conference Board and its March consumer confidence. Economists are forecasting a reading of 62.0, after February's 64.0 reading. Also due out is February's existing home sales, where economists forecast a 5.80 million annual rate.

Jeff Bailey

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