You might want to take some Dramamine with that green beer. Stocks are going to take a dip in the early going, though a number of converging factors could make for some volatile swings as the session wears on.
Let's start with this morning's
Consumer Price Index. The
said that the headline CPI gained 0.5% overall in February, a tenth of a percentage point above the consensus estimate of economists polled by
. The core rate, which excludes food and energy prices, rose 0.2%, matching expectations and steady with January's pace.
Stock futures initially came off their lows on the news, but have since regressed. At 9:05 a.m. EST, the
S&P 500 futures
were down 7, about 3.5 points below fair value and indicating some early selling for the broad market. Things looked modestly negative for the big technology stocks, too. The
futures were lately down 24.5 points.
The bond market didn't move much on the CPI. The 10-year note was up 3/32 to 101 30/32 and yielding 6.234%.
Nothing changes minds like performance. The sheer scale of this week's blue-chip rally is making believers of a lot of people who a week ago couldn't imagine any good reason to buy "Old Economy" stocks. But most agree that the market's ability to sustain its latest trend will depend on some sense that the
won't continue hiking interest rates indefinitely. So news that inflation remains in abeyance is key.
Still, a third straight up day could be a tall order for the broad market, which is sitting atop some extremely impressive gains right now. The
Dow Jones Industrial Average
has added 819 points since Tuesday, a two-day record. The
, meanwhile, has risen nearly a hundred points. That could be more than enough reason to take some profits.
"After two monstrous up days, I'm going to make the easy call and say we take a breather," said Bob Basel, director of listed trading at
Salomon Smith Barney
Add to all this today's
triple-witching, which marks the quarterly expiration of stock options, index options and index futures. Historically, triple-witching gives a positive bias to the market, but at the very least, some wild moves could be in order.
"We'll see a lot of volume because of triple-witching, a lot of activity in the morning," Basel said. "But people are worn out after the week we've had, and I think it'll be quiet in the afternoon."
After spending most of the day in positive territory, the large European indices were pulling back in afternoon trading. The Paris
was up 28.66 to 6287.19, well off its session high. Frankfurt's
was down 6.8 to 7577.16, while London's
was off 48.5 to 6508.7.
The euro was trading at $0.9676.
Asian markets boomed overnight. The real fireworks were in Hong Kong, where the
exploded 723.99 higher, or 4.4%, to 17,082.99. Tokyo stocks surged, too, with the
climbing 313.09 points, or 1.6%, to 19,566.32. Sentiment in Japan was helped there after the
Economic Planning Agency
said the nation's economy showed signs of an autonomous recovery.
After trading around 105.96 yen in Tokyo, the dollar lately stood at 105.62 yen.
In Taipei, where investors remain nervous about the outcome of tomorrow's presidential election, another buying spree from the government's market stabilization fund helped Taiwan's
index close up 80.51 at 8763.27.
For a look at stocks in the preopen news, see Stocks to Watch, published separately.