It's shaping up to be a flattish morning on Wall Street.
There aren't a lot of fundamental reasons why stocks should move one way or the other. Corporate news is very scarce, and no
companies are scheduled to release earnings. The biggest development on any front is the
upward revision of fourth-quarter
gross domestic product
to a whopping 6.9%. It's not much of a stretch to say that that pace, which easily surpassed the 6.4% expected by economists polled by
, outstrips the capacity of the U.S. economy.
"That puts a question mark out there," said Doug Myers, vice president of equity trading at
in Atlanta. "But people didn't react that much. Maybe people are getting a little numbed to these numbers."
Indeed, stock futures traders weren't especially fazed. At 9:05 a.m. EST, the
futures were up 1.2, fractionally below fair value and not indicating much of a clear direction for the day ahead. The
futures were off 26.95 to 4265.55, suggesting a bit of consolidation in store for the large-cap tech stocks.
The hot GDP report was balanced by a friendly print in the report's inflationary component, the implicit price deflator. The price deflator came in at 2%, unchanged from the previous quarter and two-tenths of a percentage point lower than expectations. "To me, that's the real inflation number," Myers said. "That was the important thing."
Technicians with any interest in the
Dow Jones Industrial Average
had to be encouraged to see it rally so strongly from its sub-10,000 dip late in the afternoon yesterday. The last time the 30 industrials touched 10K was back on Oct. 15. They bounced hard, starting a rally that went on almost without interruption through the end of the year, when they closed at 11,497. That's a very nice precedent.
But today's market forces certainly aren't what they were in late 1999, and there's little in the market's macro trends to keep the Dow from coming back to test 10K again today. The well-worn tale of divergence between outperforming technology stocks and the rest of the market continues. And remember: Once a support level has been convincingly broken, it becomes a resistance level.
The bond market was little changed, with the 10-year Treasury off 5/32 to 100 26/32 and yielding 6.388%. The 30-year bond, meanwhile, was up 2/32 to 100 19/32, putting its yield at 6.133%.
The large European indices were solidly in the black in the early afternoon, paced by the Paris
, which was up 78.48, or 1.3%, to 6157.26. London's
was up 37.3 to 6124.0, while Frankfurt's
was 27.97 higher to 7668.50.
The euro was lower against the dollar, lately trading down at $0.9805.
Asian markets managed to move higher overnight.
Tokyo stocks got a boost from the launch of six new mutual funds, which had retail investors scrambling to pick up tech shares in hopes their picks would be matched by the funds' managers. The
rose 246.44, or 1.3%, to 19,817.88,
The dollar ranged around the 110.8 level in Tokyo trading, and was lately trading at 110.98 yen.
In Hong Kong, talk that
Pacific Century Cyberworks
for phone company
Cable & Wireless HKT
climb 142.32, or 0.8%, to 17,200.98. PCCW shares were suspended from trading, when the firm said it was ready to "issue an announcement in relation to C&W HKT on Monday."
For a look at stocks in the preopen news, see Stocks to Watch, published separately.