Mo' Better Bonds Have Stocks Streaking

The long bond yield has dropped to 5.79%, giving stock traders strength.
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The notion that the bonds have put their worst days behind them has caught hold on Wall Street, and that's putting a bid in stocks this morning.

"We're going to open up higher," said Bill Meehan, market analyst at

Cantor Fitzgerald

. "The bonds have held and it looks to me like they'll continue to bounce. If that's the case, we'll have some decent action in the financials and they'll continue to support the market."

Meehan also noted that if the bonds stay on track here, investors will feel more comfortable with growth stocks. The market's value-beats-growth theme may begin to see a bit of a reversal here, at least in the short term.

At 9 a.m. EDT, the

S&P 500

futures were up 2.5, about 3.5 above fair value and indicating a good open.

Bonds showed little reaction to a wider-than-expected March trade gap. The 30-year Treasury was up 4/32 to 92 8/32, dropping the yield to 5.80%.

After five days of losses, Japanese stocks edged forward. But by no means was conviction strongly held.

It appears that the recent strength of the dollar is drawing cash out of the market. That's significant when one remembers that it was an influx of money from overseas that helped power Tokyo higher this year. Ultimately, a strong dollar is good for profits at Japan's global blue-chips, but until dollar/yen stabilizes, foreign investors may shy away.

The

Nikkei

added 71.81 to 16,199.99.

The dollar's strength against the yen is a problem for Hong Kong stocks, too. This puts pressure on Hong Kong's dollar peg, and as a result has forced interbank rates higher. Add to that nervousness over the

Fed's

shift to a tightening bias, and it looks like Hong Kong stocks may be, at best, rangebound for a while here.

The

Hang Seng

slipped 27.72 to 12,375.42.

Yen weakness hurts South Korea's market, too, because so many companies there compete with Japanese ones globally. The

Kospi

fell 26.38, or 3.6%, to 708.6.

Europe's major bourses were higher, pushed by gains in the financial and telecom sectors. In Frankfurt, the

Dax

was up 59.53, or 1.3%, to 5246.3. In Paris, the

CAC

was up 26.3 to 4402.21.

Weaker-than-expected U.K. retail sales put a bid in the gilts market and helped send London stocks higher. With the

Bank of England

very nearly voting a rate cut at its last meeting, expectations are high that it will loosen the taps next month.

Also helping stocks:

British Telecom

(BTY)

which continued to see gains on yesterday's strong fourth-quarter earnings news. The

FTSE

was up 77.4, or 1.2%, to 6344.1.

Thursday Wake-Up Watchlist

By

Brian Louis

Staff Reporter

  • Healtheon (HLTH) and privately held WebMD confirmed they're merging. Healtheon it will issue 1.815 shares for each WebMD share. Healtheon and WebMD will each own half of the merged company.
  • Bertelsmann confirmed it's in talks with Microsoft (MSFT) - Get Report regarding jointly buying part of Deutsche Telekom's (DT) - Get Report cable television network.
  • The Heard on the Street column in The Wall Street Journal today offers up a positive piece on Cox Communications (COX) .
  • Danka Business Systems (DANKY) sold a 90% stake in its outsourcing business, Danka Services International, to a company controlled by Schroder Ventures for $300 million.
  • Devon Energy (DVN) - Get Report is buying PennzEnergy (PZE) . PennzEnergy shareholders will own about 31% of the combined company, which will have a market cap of about $2.6 billion, and Devon shareholders will own about 69%.
  • John M. Devine, Ford's (F) - Get Report chief financial officer, will retire at the end of September, the company said. Effective July 1, Vice Chairman W. Wayne Booker will take the additional post of CFO.
  • MTV Networks, a unit of Viacom (VIA) - Get Report, and TCI Music (TUNE) , a subsidiary of Liberty Media (LMG.A) that will be renamed Liberty Digital in connection with a recently announced deal, set an Internet music alliance. Under terms of the pact, Liberty Digital will buy a 10% stake in MTV Networks' online music ventures, while MTV Networks online music ventures will buy SonicNet from Liberty.
  • Tech Data (TECD) - Get Report agreed to become the IT procurement, configuration and assembly, and logistics services provider for the GE Capital IT Solutions unit of General Electric (GE) - Get Report. The three-year deal is expected to generate about $2 billion in annual incremental revenue for Tech Data, whose sales for the latest year were $11.5 billion.
  • Lawnmower behemoth Toro (TTC) - Get Report expects second-quarter earnings from continuing operations to come in between $1.81 and $1.83 a share, which would beat Wall Street estimates. The First Call three-analyst consensus estimate currently calls for Toro to earn $1.73.