Monday: ITT Nibbling at Ladbroke?

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After a nice weekend, trading desks are optimistic.

"As long as the Purchasing report

due at 10:00 AM EST isn't too outrageously out of line, I think we have an up day brewing," said one trader this morning. "We should be up eight to ten at the open."

But will the bulls be right? Others warn of cautious trading, thin volume and more volatility for the next few days, as the market waits out the Federal Open Market Committee's meeting on Tuesday and Wednesday.

The bond and futures markets are giving mixed messages as well. The benchmark thirty year Treasury bond is down 6/32 at 96 4/32, pushing the yield up 0.02%. The S&P Futures are up 2.10.

The rumor on the floor in London is that

ITT

(ITT:NYSE) is considering taking over

Ladbroke

in an effort to stave off

Hilton

(HLT:NYSE). Other than that, trading is nervous ahead of Tuesday and Wednesday's FOMC meeting. The FTSE is down 16.29 at 4259.50. In Frankfurt, the Dax closed at 3062.29, up 27.14, in quiet trading.

Apple

(AAPL:Nasdaq), the world's most over-reported company (with the chattiest workers) is expected to announce a major restructuring today. Besides massive layoffs, the company is said to be considering spinning off its Newton division and giving co-founder Steve Jobs a more prominent role in day-to-day operations.

Worldwide semiconductor sales fell in December, 0.9% lower than November's sales and 16.6% lower than year ago levels. The sales figures are part of the Semiconductor Association's new Global Billings Report, which replaces the old Book-to-Bill ratio. Is this bad? "The market might read that as slowing growth, which could mean lower interest rates, which would be bullish," said one trader. "The market has been so counterintuitive lately that it's hard to read this number."

In Japan today it is Setsubun, when children throw beans out the door in an effort to drive away the ogre of Old Man Winter--something that Japanese investors might want to take up, given the way the Tokyo markets have withered. The Nikkei fell 117.49 to close at 18,212.52. In what may be a positive sign, after the close, an auction of land owned by the former Japan National Railway fetched 372.3 billion yen--far more than the expected 200 to 300 billion yen. Some see the higher price as a sign that Japan's real estate market has finally bottomed. Recall that many of Japan's banks' bad loans were made in real estate. In Hong Kong the Hang Seng was up 80.56 at 13,402.35.

By Justin Lahart

jlahart@thestreet.com