Morning Update

Economic Docket Spreading Holiday Cheer

In the final session ahead of the Christmas holiday weekend, stocks are modestly higher on light volume in an abbreviated trading day, which has conviction on the Street in short supply, following a larger-than-expected drop in jobless claims and as durable goods orders rose more than anticipated after excluding transportation. Equity news is light, with Dow member Pfizer announcing it has received an unfavorable letter from the FDA pertaining to its anxiety treatment, but the healthcare sector received some support after the Senate approved President Obama's healthcare reform bill. Treasuries are lower following the manufacturing and jobs data. Overseas, Asia moved higher, while Europe is near the flatline as several major markets are closed.

As of 8:53 a.m. ET, the March S&P 500 Index Globex future is 2 points above fair value, the DJIA is 34 points above fair value, and the Nasdaq 100 Index is 5 points above fair value. Crude oil is lower by $0.26 at $76.41 per barrel, and the Bloomberg gold spot price up by $11.85 at $1,099.40 per ounce. Elsewhere, the Dollar Index-a comparison of the US dollar to six major world currencies-is down 0.3% at 77.68.

Dow member Pfizer Inc. (PFE $19) announced that it has received a complete response letter from the Food and Drug Administration (FDA) pertaining to the company's new drug application for its monotherapy treatment, Lyrica, for generalized anxiety disorder. PFE said the FDA determined that the data contained in the application were insufficient to support approval. The company said the application was a resubmission in response to a "not-approvable" letter issued by the FDA in August 2004. PFE said the FDA continues to review a separate application for Lyrica as adjunctive therapy for the treatment of generalized anxiety disorder.

Meanwhile, in related industry news, the US Senate voted to approve President Barack Obama's healthcare reform bill early this morning in a 60-39 vote, as all Democrats and two Independents voted in favor, while all Republicans opposed. Now healthcare reform negotiations will commence next month between the Senate and the House-which approved its own version in early November-and once an agreement is made on a single bill, each section of Congress will vote again before it lands on President Obama's desk to be signed into law.

Durable goods rise, jobless claims fall

All US financial markets will close early today at 1:00 p.m. ET and remain closed on Friday, but traders have some key economic reports to consider during this abbreviated session ahead the Christmas holiday weekend.

Durable goods orders rose by 0.2% in November, versus the 0.5% rise that had been forecast, and October's 0.6% decrease in orders was left unchanged. Ex-transportation, orders were up 2.0%, compared to the 1.1% growth forecast, and October's figure was favorably revised from a 1.3% decrease to a 0.7% decline. Monthly orders data of goods intended to last at least three years can be very volatile as large orders for items such as airplanes and military equipment have a tendency to distort the data. Nondefense capital goods ex-aircraft, considered a good proxy for business spending, rose 2.9%.

Weekly initial jobless claims fell by 28,000 claims to 452,000-the lowest since September 2008, before the Lehman Brothers collapse-versus last week's figure which was left unrevised at 480,000. The Bloomberg consensus called for claims to decrease to 470,000. The four-week moving average, considered a smoother look at the trend in claims, fell to 465,250 from 468,000, and continuing claims dropped by 127,000 to 5,076,000, compared to the 5,170,000 forecast. Treasuries moved lower after the manufacturing and jobs reports.

Thin trading in Europe has markets flat

Stocks in Europe are near the flatline in lighter-than-usual trading ahead the holiday weekend, with most markets across the pond, including Germany, Italy, Spain, Sweden and Switzerland closed today. The UK markets are open and the FTSE 100 Index is 0.4% higher, led by oil and gas issues after yesterday's larger-than-expected decline in crude oil inventories, while materials are also helping the advance as key metal prices continue to gain ground. European markets will close early today.

Asia higher in subdued action

Stocks in Asia were broadly higher in light action as the holiday weekend looms and some markets in the Asian/Pacific region will be closed tomorrow. Japan's Nikkei 225 Index rose 1.5%, led by export issues on the increased optimism about profits of companies that rely on business in the US and outside Japan, on the recent weakness in the yen as the greenback reached a three-month high versus most major currencies this week. Shares of export-oriented firm and the world's largest camera maker, Canon (CAJ $42), moved solidly higher on the aforementioned optimism about the lower yen, and after the company maintained its dividend and the European Union approved a takeover of Dutch office equipment maker OCE (OCENY $12). Elsewhere in the region, China's Shanghai Composite Index jumped 2.6% following yesterday's forecast by an official at the National Bureau of Statistics that China's economic growth in 4Q will exceed the 8.9% posted in the previous quarter.

Rounding out the rest of the day's trading in Asia, Australia's S&P/ASX 200 Index rose 1.1%, South Korea's Kospi Index gained 1.3%, Taiwan's Taiex Index advanced 0.8%, India's BSE Sensex 30 Index was also up 0.8%, and Hong Kong's Hang Seng Index moved 0.9% higher. In economic news, the Bank of Japan released the minutes from its November policy meeting, showing that "many" members agreed to maintain its stance of responding promptly to changes in the market situation. This meeting preceded the BoJ's emergency meeting on December 1st, in which it deployed a 10 trillion yen ($110 billion) fixed-rate lending facility to combat the steep advance in the Japanese yen, which reached a 14-year high against the dollar in late-November.