Reports that

IBM

(IBM) - Get Report

and

Dell

(DELL) - Get Report

will unveil a multibillion-dollar pact today, along with momentum from yesterday's late-day snapback, have stocks looking higher this morning.

At 9 a.m. EST, the

S&P 500

futures were up 3.1, more than 7 over fair value and indicating a nice hop at the open. Though there is nary a detail about what the IBM/Dell deal will bring (except for a

Carl Sagan

-like mantra that it will be worth billions and billions of dollars), techs look like they will substantially outperform the broader market. The

Nasdaq 100

futures were up 14.5, putting them 27 points above the cash index.

"It looks like it will be off to a pretty good start this morning," said one trader. "This IBM/Dell news could be exactly what the doctor ordered."

But for all the morning's exuberance, caution will likely reign in the latter hours of trading. Tomorrow morning brings the February

employment report

, and everyone is worried that bonds could get hammered.

"We're sitting here waiting to see if the bond market gets crushed tomorrow," said Bryan Piskorowski, market analyst at

Prudential Securities

. "I think we could get a bit of a pullback" later in the day.

The bond market was again hoping for something like stability. The 30-year was off 4/32 to 93 16/32, putting the yield at 5.71%.

Tension -- the push and pull of buyers and sellers, of bullish and bearish events and ideas -- exists in all markets. In Tokyo right now, the tension is notable. Pushing stocks higher: the rising dollar, rebounding bonds, the

Bank of Japan's

pushing the overnight call rate to near zero and the government's desire to see the

Nikkei

to close out the fiscal year at the end of the month with, if not a gain for the first time in three years, a not-too-horrible loss. Pulling stocks lower: worries that Japan's economic malaise will only deepen and the continued unwinding of cross-shareholdings -- the stocks that companies within the same groups own in each other.

Today the bulls and bears were evenly matched. The Nikkei closed up 13.09 to 14,183.45.

There was little movement in Hong Kong stocks the day after the government submitted its budget. The

Hang Seng

slipped 9.64 to 9912.76.

In Europe, it has been another day of big losses on the Frankfurt bourse after

gross domestic product

figures showed the German economy shrank by 0.4% in the fourth quarter. The

Dax

was off 60.65, or 1.3%, to 4637.02.

The other major European bourses were edging higher in expectation of a good U.S. open. In Paris, the

CAC

was up 25.3 to 4029.46. In London, the

FTSE

was up 3.4 to 6051.7.

Thursday's Wake-Up Watchlist

By

Brian Louis

Staff Reporter

Germany's

Siemens

is about to expand into the data networking business by forming an American subsidiary, buying two private companies, investing in a third and hiring a senior executive from IBM, Martin C. Clague, general manager for global network computing solutions,

The New York Times

reported, citing executives close to the company's planning.

The manufacturing company is also in preliminary talks with

3Com

(COMS)

regarding paying $1.2 billion for the 3Com unit that sells networking equipment to phone companies, the

Times

reported, citing the executives. The newspaper reported that Siemens plans to announce on Monday that it will buy

Castle Networks

for about $300 million in cash and

Argon Networks

for roughly $240 million in cash. Siemens will also announce a deal to acquire a $30 million stake in

Accelerated Networks

, the

Times

reported.

IBM and Dell are expected to announce a broad agreement that could generate significant revenue for IBM,

The Wall Street Journal

reported, citing people familiar with the matter. The

Journal

reported the two computer titans are expected to announce the pact at a news conference today in New York.

AT&T Canada

, one of Canada's leading telecommunications carriers, and

MetroNet Communications

(METNF)

, Canada's largest facilities-based competitive local exchange carrier, have agreed to merge in a deal valued at $4.6 billion. AT&T Canada is a division of

AT&T

(T) - Get Report

.

In other news (earnings estimates are from

First Call

):

Salomon Smith Barney

initiated coverage of

American Express

(AXP) - Get Report

with a buy rating.

Bluefly

(BFLY)

entered into a marketing agreement with

Excite

(XCIT)

. Under the deal, Bluefly's online store will be integrated throughout Excite.com, WebCrawler.com and the Excite co-branded channels of

Netscape's

(NSCP)

Netcenter sites through a combination of commerce, advertising and promotional programs.

Costco

(COST) - Get Report

reported second-quarter earnings of 66 cents a share, beating the 19-analyst view and up from the year-ago 56 cents.

Dayton Hudson's

(DH)

total February same-store sales rose 8.3%.

Dollar General's

(DG) - Get Report

February same-store sales rose 4%.

Goody's Family Clothing's

(GDYS)

February same-store sales rose 0.4%.

JC Penney's

(JCP) - Get Report

February department store same-store sales fell 0.4%.

Limited's

(LTD)

February same-store sales rose 13%.

Mattel

(MAT) - Get Report

announced a reorganization of its management structure and said that Bruce Stein, president-

Mattel Worldwide

and chief operating officer, and Gary Baughman, president of

Fisher-Price

, will leave the company.

Neiman Marcus'

(NMG)

February same-store sales rose 3.3%.

Sears'

(S) - Get Report

February domestic same-store sales increased 0.8%.

ShopKo's

(SKO)

February same-store sales rose 6%.

Southwest Airlines

(LUV) - Get Report

will announce plans to begin flying to North Carolina's Raleigh/Durham airport in its continuing East Coast invasion,

TheStreet.com

reported Wednesday.

Staples

(SPLS)

posted fourth-quarter earnings, excluding a charge, of 22 cents a share, beating the 20-analyst view of 20 cents and up from the year-ago 16 cents. The company said fourth-quarter same-store sales rose 10%.

Saying it has an "open mind" about a $777 million takeover bid by

Philips Electronics

(PHG) - Get Report

,

VLSI

(VLSI)

said it will hold a special board meeting March 23 to consider the unsolicited bid.

Wal-Mart's

(WMT) - Get Report

total February same-store sales rose 10.3%.