Morning Looks Soft, But Traders Modestly Optimistic

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By Justin Lahart
Staff Reporter

It looks like stocks will continue yesterday's gains this morning, according to traders.

"It's mostly upticks this morning," said one trader. "Bonds are up, and there are a lot of strong earnings. There's also anticipation that

Microsoft's

(MSFT) - Get Report

earnings will be strong."

But another trader worries that the tech stocks, despite their strong earnings, aren't leading stocks higher. Volume continues to be relatively low, he notes, and that could mean more volatility.

The

S&P 500

futures are up a fraction, which puts them slightly above fair value.

Initial Jobless Claims

for the week ended Saturday are up 332,000, 12,000 higher than expected. The previous weeks number was revised upwards from 318,000 to 324,000. The news helped firm the bond market -- the 30-year Treasury bond is up 10/32 at 94 15/32, pushing the yield to down to 7.07%.

Mexican media mogul and power broker Emilio Azcarraga Milmo died Wednesday. The former head of Mexico's

Grupo Televisa

(TV) - Get Report

passed the reins over to his son last month. He's noted in the states for his failed bid to start a national sports daily.

If you use

Microsoft's

(MSFT) - Get Report

Microsoft Network

for your email needs, you're out of luck -- the company shut down its servers last night. They'll be back up in 24-to-36 hours. Harkens to

America Online

(AOL)

. Microsoft reports first-quarter earnings after the close tonight.

Digital Equipment Corp.

(DEC)

posted first-quarter earnings of 27 cents a share, 3 cents better than

First Call

estimates.

Schering-Plough

(SGP)

reported first-quarter earnings of $1.03, a penny ahead of First Call expectations.

Dean Witter Discover

(DWD)

reported first-quarter earnings of 81 cents a share, in line with First Call estimates.

Continental Airlines

(CAI.B:NYSE) reported first-quarter earnings of 95 cents a share, 6 cents better than First Call expectations.

Bell Atlantic

(BEL)

reported second-quarter earnings of $1.17 a share, in line with First Call estimates.

Lucent Technologies

(LU)

reported first-quarter earnings of 10 cents a share, 2 cents better than First Call estimates.

In Japan, the

Nikkei

managed to keep its head above 18,000 for a second day, closing up 62.21 at 18,093.41. A decline in the dollar, prompted by Eisuke "Mr. Yen" Sakakibara's suggesting that the dollar has risen too high, led to profit taking in international blue-chips -- notably

Sony

, which shed 110 yen to close at 8,810 yen.

Rather than taking Wall Street's lead, Hong Kong stocks slipped, with the

Hang Seng

dropping 65.08 to close at 12,516.23. Uncertain about the Fed's plans, many large investors are reportedly warming the benches.

Despite a bigger-than-expected drop in the March

Business Climate Index

, German stocks were higher. The

Dax

closed at 3383.25, up 29.80

More quiet trading in London -- which is to be expected until the country gets done with the May 1 general election. Benign retail price data for March and the surge in the

Dow

have helped lead the

FTSE

modestly higher -- it's up 3.5 at 4298.10.