Usually, a bout of late-day selling like
yesterday's will trigger one of two things at the bell the next morning: Stocks will go up sharply, or stocks will go down sharply.
When they go up sharply, odds are it's a head fake (assuming an absence of big news). Better to wait for prices to come down than chase the rally. When they go down, odds are that stocks will find a level and then bounce. Catch them near their nadir, and money is made.
But today stocks look pretty flat on the open, and that makes for an uncertain open. Note that today marks the expiration of May stock and index options, which always makes the market a little more volatile. That usually keeps investors out of the market -- as if the blue skies in New York weren't enough of an excuse.
"We're getting to that time of year when volume lightens up a lot on Fridays, particularly in the afternoon," said Dan Mathission, head stock trader at
. Though thin volumes often make for volatility, Mathisson thinks today won't be too rocky. "The broader market -- I'm not expecting it to be a wild day. The market looks OK."
At 9 a.m. EDT, the
futures were unchanged, putting them near fair value and indicating a mixed open. But strength in the Treasury market -- where it is options expiration day as well -- looked like it might give stocks a boost. The 30-year was up 16/32 to 92 10/32, dropping the yield to 5.80%.
With investors heartened that the
will hold the 16,000 level and bargain hunters coming into the market, Tokyo stocks gained ground for a second day. Also boosting stocks: Finance Minister
, who said that the government may consider a supplementary budget. The
gained 92.99 to 16,292.98.
Hong Kong stocks dropped again. More than sellers, Hong Kong has seen a lack of buyers. With the interest-rate outlook unclear and expiration coming next week, many investors are opting to ride the pine. The
slipped 103.28 to 12,272.14.
With uncertainty over the U.S. open and expirations of their own to deal with, European bourses saw muted action. In Frankfurt, the
was up 24.96 to 5260.60. In Paris, the
was off 7.12 to 4414.79. And in London, the
was up 12.6 to 6380.8.
Friday's Wake-Up Watchlist
- AK Steel (AKS) - Get Report is buying
Armco (AS) for $7.50 a share in stock, or $842 million. Armco shares closed Thursday at 5 5/8.
Alcan Aluminum (AL) - Get Report was upgraded by
Donaldson Lufkin & Jenrette to buy from hold.
Baker Hughes (BHI) named G. Stephen Finley chief financial officer, replacing Eric Mattson.
DaimlerChrysler (DCX) Chairman Robert Eaton said the company will look for more acquisitions as it shoots to double revenue within the next decade, and he indicated that financial services are a key area for expansion,
The Wall Street Journal reported, citing comments made by Eaton during taping of
AutoLine Detroit, a Detroit public television station program that's slated to air Sunday morning in Detroit.
Delphi Automotive Systems (DPH) will replace
Moore (MCL) in the
S&P 500 after the close May 27.
General Motors (GM) - Get Report will complete the spinoff of Delphi May 28.
Donaldson Lufkin & Jenrette
(DLJ) filed an amendment to its registration statement with the
Securities and Exchange Commission regarding its proposed IPO of its online brokerage unit
DLJdirect, raising the amount of shares to be offered to 16 million up from 15 million, and increasing the proposed price range to $18 to $20 a share from $13 to $15.
Keebler (KBL) reported first-quarter earnings of 37 cents a share, 2 cents ahead of the
First Call 10-analyst estimate and up from the year-ago 16 cents.
Merck (MRK) - Get Report got
Food and Drug Administration approval to market its
Vioxx drug for relief of the signs and symptoms of osteoarthritis, management of acute pain in adults, and treatment of menstrual pain.
Olivetti's $65 billion hostile takeover bid for
Telecom Italia (TI) expires today.
DLJ initiated coverage of
priceline.com (PCLN) with a buy rating and set a price target of 190. The stock closed Thursday at 134 3/8.
Coty, a seller of fragrances and cosmetics, is in talks to acquire part or all of debt-ridden cosmetics company
Revlon (REV) - Get Report,
The New York Times reported, citing executives close to the negotiations. Coty is a unit of
Benckiser (BNV) , a Dutch consumer products company. The
Times article said that besides Coty, among the other names that have been circulating as potential bidders are
Unilever (UL) - Get Report;
Shiseido, a Japanese cosmetics company; and
Procter & Gamble (PG) - Get Report.
Bloomberg News reported yesterday that
Warner-Lambert (WLA) is holding merger talks with
Schering-Plough (SGP) . The report, citing a person familiar with the talks, says discussions have gone on over the past two years and have intensified in recent weeks, though no deal is pending and the talks could founder.
The Inside Wall Street column in
Business Week reports that some analysts and money pros think
Agco (AG) - Get Report, an agricultural equipment maker, could be a takeover target. The column quoted an unidentified New York investment banker as saying: "A foreign conglomerate is seriously considering making an offer of 24 a share." Agco stock closed yesterday at 10 5/8.
Hauppauge Digital (HAUP) will announce a joint venture soon with a large Internet company that broadcasts streaming media programming on the Web and the company is also forming a marketing alliance with a major e-commerce company, the column reported, citing a New York money manager.
The column also contains a bullish piece on
Modem Media.Poppe Tyson (MMPT) .