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Futures tack on gains in early trade

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Traders are looking at a higher open as stock futures add to gains this morning as economic data gets a positive response from traders.

Consumer prices were unchanged in May, while the core rate, excluding food and energy costs rose 0.3%. Economists had forecasted a 0.1% decline in the CPI, and a 0.1% gain in the core rate. This morning's report helped alleviate some fears of deflation. While the core rate increased in May, inflation is still trending lower this year. For the first five months of 2003, the CPI is running at a 2.3% seasonally adjusted rate, compared with a 3.0% rate over the same period last year. May's CPI was boosted by a record rise in the cost of hotel rooms. The core rate is at 1.1% year to date, compared to a 2.1% rate in the first five months of 2002. Energy prices fell 3.1% in May after falling 3.1% in April, while food prices rose 0.3% after falling 0.1% in April.

In other economic news, the Commerce Department said housing starts rose 6.1% to a 1.732 million-unit annualized rate in May, which was above economists' forecast of 1.700 million. Building permits, a gauge of future activity, rose 3.7% in May in an annualized rate of 1.788 million, which was well above economists' forecast of 1.723 million.

Since the release of this morning's economic data, S&P futures (sp03u) have added 2 points and currently trade higher by 6 points at 1,105.20. NASDAQ futures (nd03u) are rising 7 points to 1,253, while Dow futures (dj03u) are gaining 38 points to 9,330.

Fair value for the S&P 500 today is $-1.18. That price will not change during the session. HL Camp & Company has their computers set for program buying at $0.24 and set for program selling at $-2.28.

Foreign Markets

Asian markets traded strong with the Nikkei-225 breaking the psychological 9,000 barrier and closing at a new high for the year (2003), but still well off its all-time high of 38,915.87. Shares of Canon Inc. led the Nikkei rally as the most actively traded. The world's largest office equipment maker rose 4.99% to close at an all-time high of 5,680 yen.

European bourses followed U.S. market gains with financials accounting for more than 1/2 of the FTSE-100's gains as investors bid shares higher ahead of next weeks FOMC meeting on speculation that U.S. interest rates would be cut. Lloyds TSB was a major gainer, up 3.4% after it said it had received offers for its subsidiary National Bank of New Zealand. Analysts put a price tag of up to $3.9 billion on any sale.

Asia/Pacific

Hong Kong.......Hang Seng........10,030...+168.....+1.70%

Japan...........Nikkei 225........9,033...+193.....+2.19%

Taiwan..........Taiwan Weighted...4,973....+80.....+1.65%

Europe

France..........CAC 40............3,202....+27.....+0.87%

Germany.........DAX...............3,299....+34.....+1.06%

Switzerland.....Swiss Market......4,949....+48.....+1.00%

United Kingdom..FTSE 100..........4,182....+29.....+0.71%

Jeff Bailey

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