Positive open for stocks as traders await FOMC statement this afternoon. The bulls have been able to claim victory the past few weeks, but gains have been mild and volumes light. With Friday being quadruple witching, volumes could pick up, but unless something unexpected occurs, trading is likely to remain quiet.

On Monday, the housing market index for March showed a decline of two points on tight credit, bad weather and a large number of defaults. This news was followed up this morning with a decline in housing starts. February starts fell to an annualized rate of 0.575 million units, down from 0.611 million in January. However, January's figure was revised up from the initial figure of 0.591 million units. Building permits also fell, down to 0.612 million from 0.622 million in January.

The FOMC will release its statement this afternoon, though most do not expect any changes in rates or the statement. There has been a lot of talk about the Fed taking out its statement that rates will remain low for "an extended period of time." Some Fed governors would like this language removed to give the Fed the ability to hike rates sooner if necessary. However, the Fed is mindful of spooking this fragile economy and most economists do not feel the statement will change.

Import and export prices helped further ease concerns about inflation pressures. Export prices in February fell 0.5 percent with import prices down 0.3 percent. This points to subdued data on producer and consumer prices when released this week. Of course, the Fed has stated for months now that they feel inflation pressures will be subdued for some time, allowing them to continue supporting the economy.

Chip stocks are positive this morning led by Intel (INTC) and Advanced Micro (AMD). Intel launched its newest data center processor this morning, ahead of AMD, which is expected to release its latest processor in the near term. Nonetheless, both stocks are seeing gains with INTC up 1.5 percent to resistance at its 52-week high of $21.55. AMD is also up 1.5 percent, although it remains about 10 percent below its 52-week high. Overall, the Semiconductor HOLDRs (SMH) are up one percent in early trading.

Shares of Boston Scientific (BSX) are up nearly three percent despite being cut to "Conviction Sell" at Goldman Sachs. However, the pop has to do with a recovery from a 12.5 percent decline on Monday. The company announced yesterday that it would indefinitely stop selling certain defibrillators after failing to report manufacturing changes to the proper authorities. BSX shares are trading near $7.00 with a 52-week range from $6.31 to $11.77.

Jody Osborne
Senior Staff Writer & Options Strategist
Optionetics.com ~ Your Options Education Site