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The market is leaning toward an early bounce after Friday's broad


At 9:10 a.m. EST, the

S&P 500

futures were up 0.2 point, nearly 3 points above fair value and indicating a modest early rally. The

Nasdaq 100

futures were up 12 points to 3980, a good indication for tech.

There's an unwritten rule among traders about snapbacks from deep selloffs: Don't chase them. The market has sustained enough technical damage to cast a thick pall over a reflexive, program-driven rebound this morning. The S&P 500 blew clean through its 200-day moving average on Friday, snapping support at 1380 -- a level it broke through back in November, and which it had been bouncing off intraday all last week -- like it was

Joe Theismann's leg.

"I'm not convinced that it's any more than a technical bounce," said Jim Volk, co-director of institutional trading at

D.A. Davidson

. "Now there's a perception that valuation

standards may have changed, and if that becomes more widespread, we may get a little further correction."

Still, there are other consequences to Friday's selling that can't be ignored:

American Express

(AXP) - Get American Express Company Report

TheStreet Recommends

at 138 1/4;

General Electric

(GE) - Get General Electric Company Report

at 125 1/8;


(MSFT) - Get Microsoft Corporation Report

at 95 1/16. A lot of stocks are sitting at what recently would have been considered extremely attractive levels, and it's hard to believe they won't find some buyers.

Stocks have one thing on their side: the bond market, which was extending the strength it showed on Friday. The 10-year note was up 14/32 to 100 16/32, putting its yield at 6.431%. The 30-year Treasury, meanwhile, was up 17/32 to 101 27/32 and yielding 6.115%.

SBC Communications'


$3.9 billion

purchase of

Sterling Commerce

(SE) - Get Sea Ltd. (Singapore) Report

leads the morning's M&A headlines.

The large European indices were moving higher in afternoon trading, paced by Frankfurt's

Xetra Dax

, which was up 71.20, or 0.9%, to 7661.73. The Paris


was up 21.11 to 5988.39, while London's


was up 22.7 to 6104.3.

The euro had moved back above dollar parity and was lately trading at $1.0023.

In Tokyo, news that

Standard & Poor's

had affirmed Japan's AAA sovereign debt rating did little to stanch the second straight day of selling in stocks. The Nikkei sank 153.17, or 0.8%, to 19,390.58 as institutions dumped blue-chips to bump up their earnings ahead of the March 31 fiscal year-end.

The S&P rating came in contrast to last week's

warning by

Moody's Investors Service

that it may downgrade Japan.

Meanwhile, the dollar hit a six-month high of 111.73 yen early in the trading day before falling back to 111.23 yen. It was lately sitting down at 110.95 yen.

Hong Kong stocks came under pressure in the wake of the latest flare-up between China and Taiwan. Yesterday China threatened military force against Taiwan if the island refused to hold reunification talks. The

Hang Seng

fell 67.20 to 16,255.17. At one point, the index was down by more than 300 points.



index declined 180.74, or 1.8%, to 9731.93

For a look at stocks in the preopen news, see Stocks to Watch, published separately.