Nasdaq Set for New Bounce; Dow Inches Up Slowly

Microsoft propels Nasdaq upward as last of earnings trickle in.
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The tech-strong

Nasdaq Composite Index

has found reason for another juicy bounce this morning, as news that

Lehman Brothers

would value

Microsoft

shares at the same price regardless of a breakup of the company is pumping new blood into tech bulls.

The

Dow Jones Industrial Average

could get a little boost from the Nasdaq's joy, and S&P futures have inched upward following the upswing in Nasdaq futures this morning.

At 9:20 a.m. EDT, the

S&P 500 futures

were up 7 points, over 5 points above fair value and indicating a little bit of positive sentiment for the open. The

Nasdaq 100

futures were up a hefty 64 points, indicating some buying pressure for large-cap technology stocks in the early going.

"Microsoft: everybody likes it, they think the sum of the parts will be more profitable than the whole, and that's going to take the tech stocks higher," said Brian Finnerty, head of trading at C.E. Unterberg Towbin.

"I think the bounce in tech will hold. It feels really good and Friday was really strong," he added.

Lehman Brothers analyst Michael Stanek said this morning that Microsoft shares would be worth $125 to $135 whether the company is split up or not after Friday's request from the

Justice Department

that the software giant be broken into two parts. For more on this

story, see our coverage from the TheStreet.com/NYTimes.com joint newsroom.

But tech was looking strong anyway. The fact that the Nasdaq had such a nice rebound late last week despite ugly inflation numbers Thursday and scary Soros and Microsoft news Friday seems like a good sign that it's pretty hard to keep a happy Nasdaq down.

Former tech investment wonder boys

Stanley Druckenmiller

and

Nicholos Roditi

, who ran Soros' $8.2 billion

Quantum Fund

and $1.2 billion

Quota Fund

, respectively, resigned Friday. The two managers had bet heavily on technology names starting in the latter half of 1999 but were badly hurt by the recent tech distress. For more on this

story, take a look at the coverage out of the TheStreet.com/NYTimes.com joint newsroom.

Eyes will also be trained on media mammoths

Disney

(DIS) - Get Report

and

Time Warner

(TWX)

today, as fans of

Who Wants to Be a Millionaire

all across America will be forced to find their entertainment elsewhere.

Early this morning, Disney yanked its ABC network from Time Warner's cable stations in 11 cities after the two companies failed to resolve a dispute over programming by an April 30 deadline.

Otherwise, we are unlikely to see many wild gyrations today. After some pretty rough going in recent weeks, investors may lay low in wait of this week's productivity numbers and any sign from the Fed concerning its interest-rate hike intentions. Some say news of government intentions to break up Microsoft, as well as the possibility of a 50-basis point rate hike, have already been internalized in the market.

Wall Street is very anxious to hear the final word on interest rates, and if the news is bad enough, it could take a stab at what some see as a Nasdaq bubble. Market observers began to fear a 50-basis-point rise after the

Employment Cost Index

report and

GDP

inflation indicator came out hotter-than-expected last Thursday.

The market is still waiting on the last few earnings stragglers this week.

Today we'll hear from

Cigna

(CI) - Get Report

,

Compuware

(CPWR)

,

Disney

(DIS) - Get Report

and

Manor Care

(HCR) - Get Report

.

The bond market was falling off, with the 10-year note down 1/32 to 102 and yielding 6.222%. Meanwhile, no major market-moving data are in the pipeline today.

Europe was on holiday for a little flagpole jigging as it celebrates May Day. The euro was trading down at $0.9096.

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Most Asian markets were closed for national holidays today, including Hong Kong, Singapore and South Korea. Tokyo, meanwhile, took its cues from last week's Nasdaq rebound and the Nikkei index was up 429.38 to 18403.08.

Meanwhile, the dollar inched up to around 108.01

yen

in Tokyo trading, but had lost some of that strength lately to trade at 107.79.