Market's Direction Uncertain at Open

Stocks still looking mixed to lower after yesterday's rally.

Futures have been pretty volatile this morning and, after falling to moderate lows in the last hour, they have bounced back some. At 9:00 a.m. EDT, the

S&P 500 futures

were down 1.40 points, just under 3 points below fair value and not indicating much of a trend for the early going. The

Nasdaq 100

futures were down 27.50 points, indicating some light selling pressure in large-cap technology stocks in the early going.

Whether yesterday was a lull in the storm or the beginning of a recovery remains to be seen. While the

Nasdaq Composite Index

saw its biggest point gain ever on Monday, up 217 points, breadth was poor and volatility remains high. A return to strong overall growth may still be weeks or months away.

"Hopefully we are going to see a little bit of a pullback, so we give ourselves some breathing room," said Doug Myers, vice president of equity trading at

IJL Wachovia

. "We could form a nice little base to jump off from there."

"Investors will be harder on the Nasdaq, selling both big-caps and smaller caps on the opening. They're not going to be chasing

Dow

stocks, either."

Meanwhile, several brokerages, including

Fidelity

, have tightened their rules on margin calls, shortening the time investors have to cover debts incurred on stocks whose prices fall. This doesn't portend well for the short term, as it may force smaller investors short on cash into a panicky selloff of other sounder investments.

"The tighter margin-call rules make it that much harder to swing for the fences. Investors are going to have to hit singles," said Myers.

Investors will be keeping a close eye on the virtual parade of earnings set to hit the market today, and any hint of bad news in conference calls could spoil the party. So far this morning most companies have reported earnings in line with or better than estimates and

Coca Cola

(KO) - Get Free Report

blew out expectations.

Yesterday, many placed their bets on the big-cap tech with solid valuations that suffered the greatest losses Friday, and many of these will be reporting earnings

today. The line-up includes

America Online

(AOL)

,

Intel

(INTC) - Get Free Report

,

IBM

(IBM) - Get Free Report

,

Qualcomm

(QCOM) - Get Free Report

,

Sprint

undefined

.

EMC

(EMC)

just reported earnings a penny ahead of estimates.

Still, the economy's lookin' good.

Fed

boss

Alan Greenspan

didn't do anything to dispel that notion in speeches last week, and

Lehman Brothers

and

Merrill Lynch

market strategists yesterday buoyed the market with supportive comments, reiterating their confidence in the economy and expectations for strong earnings. That projection was borne out Monday after a number of financial stocks and industrials components reported strong first-quarter figures.

Even last week's hotter-than-expected inflation figures, double consensus estimates at 0.4%, are not seen as portending dramatic inflation for the year.

The bond market was moderately off of earlier highs, with the 10-year note up 4/32 to 103 15/32 and yielding 6.026%. The Treasury this morning announced a $2 million buyback.

The large

European bourses were responding with moderate optimism to Monday's rally near midsession. The Paris

CAC

was up 69.09 to 6129.63, while Frankfurt's

Xetra Dax

was 13.98 higher to 7201.12. Across the channel, London's

FTSE

was up 13.1 to 6007.7.

The euro was trading down at $0.9501.

Reactions to the U.S. rally were largely positive in

Asian markets, but Tokyo's Nikkei was still feeling pressure and was off 39.1 to 18969.52.

The dollar edged slightly higher against the yen to 104.41 in Tokyo trading. The greenback was lately giving back gains and was down to 104.14 yen.

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