Everyone's looking to

Palm

(PALM:Nasdaq) this morning.

At 9:15 a.m. EST, the

S&P 500

futures were down 1.5. That's a couple of points above fair value, indicating a modestly positive tone to the open.

The day's biggest event will certainly be the public offering of

3Com's

(COMS)

Palm unit.

Goldman Sachs

priced the 23 million-share IPO at $38 a share, above the expected range of $30 to $32, which had already been raised from the initial $14-to-$16 range.

America Online

(AOL)

,

Nokia

(NOK) - Get Report

and

Motorola

(MOT)

have agreed to buy around $225 million of Palm stock at the offering prices.

To say that Wall Street has been looking forward to the Palm IPO would be a gross understatement. To give you an idea of the wildly positive sentiment surrounding this offering:

ABN Amro

started Palm with a buy today, setting a price target of 90. It's highly unusual for a brokerage to initiate coverage of new stock before its IPO quiet period has ended.

"It's amazing how people are chasing these things," said Doug Myers, vice president of equity trading at

IJL Wachovia

. Palm's IPO "probably will take

the

Nasdaq

up to higher highs, and that's what makes it scary. It's a dizzying height."

3Com, which will distribute its 532 million shares of Palm to 3Com shareholders within the next six months, has risen about 85% over the past three weeks in anticipation of the IPO, and been at the forefront of the Nasdaq Composite Index's incredible rush toward the 5000 milestone this week. So if you believe in the concept of market leadership and are looking for reasons why the Comp's latest rally might taper off, a post-IPO cooling of 3Com is as good as any.

But for now, 3Com refuses to ease. The stock was trading at 119 on

Instinet

, up from a close of 104 1/8. The

Nasdaq 100

futures were up 8.5 to 4334, well off their morning lows, indicating some modest early selling for the big-cap technology stocks.

The bond market was edging lower, with the 10-year Treasury down 8/32 to 100 19/32 and yielding 6.418%. The 30-year bond, meanwhile, was off 2/32 to 101 5/32, putting its yield at 6.164%. Today's data include

TheStreet Recommends

new home sales

for January and the

Conference Board's leading economic indicators

, both due out at 10 a.m. But those are minor blips compared with tomorrow's

jobs report

.

Meanwhile, as index milestones and

Fed

-speak dominate the headlines of market reports, crude oil is buzzing around at prices not seen since the Persian Gulf War, tucked snugly above the $30-a-barrel level.

No clear consensus exists as to what rising oil prices mean to the economy at large. Because its movements are cyclical, ebbing and flowing along with forces not directly linked to the U.S. economy, the cost of oil is omitted from core inflation measures.

Yet there's little doubt that more expensive crude will make its presence felt eventually. The question is who will absorb that cost -- consumers or manufacturers whose lack of pricing power leaves them unable to pass on higher pipeline costs. The first case will pinch pocketbooks just as badly as rising core inflation would. The second will squeeze corporate profits.

"I'm scared to death of it," said Myers. "Everything I'm looking at here is either petrochemical or silicon, from ink pens to the mike on my desk. So oil's a real important input."

Crude was lately trading down 17 cents at $31.60.

The large European indices were mixed after the

European Central Bank

decided to hold rates steady. In afternoon trading, London's

FTSE

was down 29.7 to 6335.2. The Paris

CAC

was up 61.16, or 1%, to 6317.48, while Frankfurt's

Xetra Dax

was off 63.36 to 7664.57.

The euro was lately sitting at $0.9732.

Asian markets were mixed overnight.

Tokyo's

Nikkei

fell 16.56 to 20,065.11 after reaching a new intraday record of 20,202.96, a level not seen since February 1997. Japanese stocks remained under pressure -- especially during the last half-hour of trading -- as institutional investors and government-affiliated financial institutions continued to shed major cross-shareholdings to book profits before the end of the fiscal year, March 31.

Short-covering and buying from U.S. fund managers helped the dollar recover from yesterday's slide, trading around 107.33 yen in Tokyo. The greenback was lately sitting at 107.47 yen.

Heavy foreign buying of

China Telecom

(CHL) - Get Report

helped Hong Kong's

Hang Seng

rise 93.22 to 16,936.81. China Telecom rose 3.9%.

South Korea's

Kospi

soared 66.28, or 8.0%, to 894.66 as tech shares benefited from the recent surge in computer-chip prices.

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