Early Going Looks Mixed for Stocks

Citigroup says John Reed is stepping down as chairman and co-CEO, with Sandy Weill to take the reins.
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Stocks are setting themselves up for a decidedly mixed open.

At 9:05 a.m. EST, the

S&P 500

futures were off 0.7, about a point above fair value and not indicating much of a trend for the early going. The

Nasdaq 100

futures were down 29 to 4165, pointing toward an extension of Friday's consolidation in the technology sector.

A lot has happened on the corporate front this morning, starting with the unexpected news that

Citigroup

(C) - Get Report

Chairman and Co-CEO John Reed will retire on April 18. Sandy Weill will take over Reed's position as chairman, as well as sole CEO.

Morgan Stanley Dean Witter

has upgraded the stock to strong buy from outperform, and Citi was trading up at 49 1/4 on

Instinet

, having closed Friday at 48.

There's also

Columbia Energy's

(CG) - Get Report

acceptance of a $6 billion bid from

NiSource

(NI) - Get Report

.

Nokia

(NOK) - Get Report

and

America Online

(AOL)

are out with a deal to offer AOL's

Instant Messenger

on Nokia wireless phones.

And, of course, there's the weekend's chattering over the possibility of

eBay

(EBAY) - Get Report

making a bid for

Sotheby's

.

So it could be that last week's talk of support and resistance levels on the

Dow Jones Industrial Average

may subside a bit as stocks trade according to their particular prospects.

Speaking of companies' prospects, a lot of ink has been spilled on the extent to which technology and Internet stocks have defied the laws of nature. Skeptics never tire of untangling the assumptions embedded in the valuations common to those sectors. Sure,

Qualcomm

(QCOM) - Get Report

may ultimately get its $20 billion in CDMA royalty payments in 2010 (the number that

PaineWebber

analyst Walter Piecyk used to justify his 250 target on the stock).

General Motors

(GM) - Get Report

sold 8 times that amount last year.

When, the question is always framed, will fundamentals matter?

Tech bulls will tell you that they already do, that the superior growth that sector offers justifies its premium valuations. And they'll note that if the Dow is going to stage any kind of sustained comeback, it will largely have to do it despite the fundamentals.

They have their points. The Dow is laden with Old Economy stocks that operate in industries where growth is anchored to market share. To a much greater extent than in tech, their game is about how large a slice of the pie they can grab, for the pie itself isn't getting much bigger.

In terms of the macro-picture, the Dow's heavy exposure to financial and cyclical stocks keeps its fortunes tied to the interest-rate environment and the demand-side of the economy. Nearly everyone agrees that the former is hostile. And while economic growth is hardly flagging -- the latest figures indicate that gross domestic product grew 6.9% in the fourth-quarter -- it's hard to imagine it accelerating.

"We're probably going to see more of the same," said Bryan Piskorowski, market analyst at

Prudential Securities

, of the split between tech and the rest of the market. "At this time, we're going to stay with techs, the telecoms, the semis and some of the B2B plays as well."

The bond market was little changed, with the 10-year Treasury down 5/32 to 101 1/32 and yielding 6.358%. The 30-year bond, meanwhile, was off 5/32 to 101 10/32, putting its yield at 6.153%.

The biggest story in Europe is the brutal beating taken overnight by the euro, which sank to a new low of $0.9390 in what some traders were calling flat-out panic selling. One theory for the selloff begins with U.S. and European fund managers unwinding long-euro/short-yen positions as expectations of an interest-rate hike by the

European Central Bank

waned. Caught off guard, Japanese investors dumped euros in stop-loss selling.

The euro has recovered in London trading, having lately moved up to $0.9683.

The large European indices were getting hammered in afternoon trading, led on the downside by Frankfurt's

Xetra Dax

, which was off 200.54, or 2.6%, to 7538.14. The Paris

CAC

was down 111.63, or 1.8%, to 6077.01, while London's

FTSE

had lost 90.4, or 1.5%, to 6107.6.

Asian markets sold off across the board overnight.

The yen's strength against the dollar and euro kept a lid on Tokyo equities, as the

Nikkei

fell 97.78, or 0.5%, to 19,720.10. The dollar was lately sitting down at 108.76 yen.

In Hong Kong, the

Hang Seng

lost 216.54, or 1.3%, to 16,984.44 amid weakness in interest-rate sensitive property and bank stocks. Investors were eager to learn about the latest on

Pacific Century Cyberworks's

bid for

Cable & Wireless HKT

(HKT)

and were disappointed when Pacific Century canceled its scheduled press briefing.

C&W HKT said that the companies may agree on a deal "within the next 48 hours." Shares of both companies were suspended from trading.

South Korea's

Kospi

tumbled 45.75, or 5.3%, to 819.01.

For a look at stocks in the preopen news, see Stocks to Watch, published separately.