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Preopen Trading: Technology in for a Positive Open

Eric Gillin

Federal Reserve Chairman Alan Greenspan will deliver the second round of his Humphrey Hawkins testimony to the House Financial Services Committee today. And you know what that means -- another mind-numbing, spine-tingling, soul-searching speech about the state of the U.S. economy.

Ahead of that, futures were right around break-even. European markets were lower around the midpoint of their trading day, and Asian markets, particularly Japan, got no sleep last night, sliding yet again.

Expect today's speech to be a doozy. Last week's higher-than-expected consumer price and producer price indices pointed to inflation, manufacturing spending and consumer confidence have sunk to lows, plus warnings from many major companies have hit the Street. There is a lot of uncertainty out there, and the Fed chief could do much to assuage fears with a kind speech. That said, the bears have been running the show lately, and if they don't like what they hear -- today could be a rough-and-tumble day.

Technology could be in for a positive open. That's really not saying much, but still. Nasdaq 100 futures on the Globex, an electronic exchange where index and currency futures trade, were up 11 to 1980. From fair value, a mathematical level that expresses the real relationship between futures and the index those futures track, that's really a gain of about 12, which points to a positive open. S&P 500 futures on Globex were off less than a point to 1263.9, which is a gain of about 4 from fair value.

British telecommunications stocks have been quite a drag on the FTSE in the new year. Ever since the floatation of shares in telecom Orange went belly up and attracted far less interest than expected, many of the bigger names suffered. Companies like Vodafone(VOD Quote) have been sliding and pushing the London index to lower lows.

Well, under the weight of sliding tech both at home and abroad, the FTSE dropped to a 16-month low of 5901 earlier in the trading day. It has rebounded since then, and last stood with a gain of 13.5 to 5954.70 at the midpoint of its session. Volume was thin. Chipmakers were big losers.

The Paris CAC-40 fell 57.0 to 5380.8, while Germany's Xetra Dax dropped 9.8 to 6210.7.

Asian markets continued to slide as the Nasdaq retests its lows in the U.S. Japan's beleaguered Nikkei 225 dropped 176.32 to 12,883.54, the lowest point since October 1998 -- a 28-month low. Tokyo traders had reason to smile, however. After the market closed, the Bank of Japan announced that it would cut interest rates, dropping the key overnight money-market call rate to 0.15% from 0.25%. The move comes as a surprise to many, who expected the BOJ to make its move at its next meeting on March 19.

Hong Kong's Hang Seng dropped 46.86 to 14,787.87.

For more on the world stock markets, check out TheStreet.com's global indices information.

For Tuesday's postclose trading, see The Night Watch.