Meet the latest world's largest bank.

Barring another surprise New Economy deal on the scale of this week's purchase of

Network Solutions




(VRSN) - Get Report

, there's no bigger corporate news this morning than that coming out of Frankfurt, where

Deutsche Bank


Dresdner Bank

have announced their plan to combine to form a massive entity with assets of $1.25 trillion. That would rival the estimated $1.3 trillion in assets held by

Dai-Ichi Kangyo Bank


Fuji Bank

and the

Industrial Bank of Japan

, three Japanese banks that have agreed to merge by 2005.

The two banks are calling this deal a "merger of equals," but Deutsche will hold about 60% of the new company.

Meanwhile, Germans are also topping the headlines here in New York, via a

Wall Street Journal

report that

Deutsche Telekom

(DT) - Get Report

has made separate

offers for




U.S. West



Stocks are still trying to find some footing after Tuesday's broad selloff, and the early outlook for the market is still unclear. At 9:05 a.m. EST, the

S&P 500

futures were up 0.6, a little more than a point below fair value and not indicating much of a trend for the day ahead. The

Nasdaq 100

futures were up 3.5 to 4461, well off their morning lows but still a mixed indication.

Take a step back from the debate over interest rates and inflation. Forget about Dow 10,000. Think about the character of the bull market itself -- something that has been looking increasingly tenuous as far as the broad market is concerned, but which has taken on an almost steroidal aspect in certain technology groups. For months now, when people talk about the bull market, they're talking about technology.

This latest version of the great bull run has been marked by a couple of important things. Perhaps foremost are the flows. Money is flowing into U.S. tech, health care and growth mutual funds on a scale that dwarfs the trend of the last five years, and it's coming largely at the expense of those funds focusing on Old Economy or value stocks.

"It's the most amazing thing I've ever seen, this divergence," said Paul Rich, a trader at

BT Brokerage

. "Everyone's dumping good stocks on the marketplace and going into tech, because they've got to catch up."

"I never thought I'd see anything reach these levels," Rich continued.

The flows aren't just domestic, either. At an equally extreme level are foreign inflows, through both financial markets (the buying of stocks) and merger and acquisition activity. This morning, along with the Deutsche Telekom offers, there's the news that Dutch-based cable TV firm

United Pan-Europe Communications


is buying

SBS Broadcasting


for $2.8 billion in cash and stock.

It's not that this trend is irrational. Tech's dramatic outperformance is underpinned by extremely attractive fundamentals. Revenue growth and profit margins in that sector are nearly without parallel, after all. From the perspective of most growth-oriented portfolio managers, with fundamentals like that, why would anyone want to bet on an imminent disruption of the current trends? Even stock market strategists, the most aloof of Wall Street's denizens, have little to gain from trying to time such a reversal.

What's worrisome to the more cautious observers is simply the extremity of the situation. After all, in the long run -- whenever that should come -- all things revert to their historical averages. And until that happens, danger exists. If nothing else, the volatility in Nasdaq stocks reminds us that the flip side of unprecedented reward is heightened risk.

Sometimes it's easy to forget that, especially after a portfolio manager on


has told you for the thousandth time that you simply can't afford not to have significant exposure to technology.

The bond market was edging higher, with the 10-year note up 11/32 to 101 4/32 and yielding 6.345%. Bond traders weren't moved much by news that initial jobless claims rose to 280,000 in the week ended Mar. 4 from the prior week's 275,000.

The large European indices were mixed in afternoon trade. London's


was up 133, or 2.1%, to 6544.2, while Frankfurt's

Xetra Dax

was down 20.6 to 7966.4. The Paris


was up 97.41, or 1.5%, to 6442.38.

The euro was trading at $0.9625.

Asian markets moved lower overnight.

Hong Kong's

Hang Seng

fell 314.40, or 1.8%, to 17,637.03. The index had been as high as 18,249.86 -- a new intraday high -- before profit-taking emerged and swung stocks sharply lower.

In Tokyo, the


shed 104.46 to 19,662.33.

One day after the

Bank of Japan's

surprise intervention, the dollar traded around 106.87 yen in listless currency action. U.S. funds were shedding the dollar early in the day, but Monday's release of Japan's fourth-quarter gross domestic product data is capping further selling, dealers said. The data is expected to show a second consecutive quarter of contraction in Japan's economy.

The greenback was lately sitting at 106.32 yen.

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