With strength overseas, a steady bond market and a smattering of merger news, stocks look like they're heading higher this morning. But whether there will be many people on Wall Street watching is an open question.
Trading has been light lately, and with nobody expecting much out of stocks as we head toward Memorial Day next week, plenty of portfolio managers are staying out of the market.
"We're going to continue to have this type of lackluster market," said Bill Allyn, head block trader at
, who thinks that it will be some time before stocks fully digest the possibility of
rate hike. At least for the richly valued big-caps, that is. "The little stocks, the small-caps, have really been the only stellar performers of late. I sort of have a hunch that's going to continue and other stocks are going to ebb and flow."
Light trading often makes for interesting action. When volume's low, it doesn't take much to get a stock running higher or lower. A good time to start a rumor.
It's also a good time to make a name for yourself if you're an analyst. Witness Michael Mayo, bank analyst at
Credit Suisse First Boston
, who today downgraded four banks --
-- to sell from hold, citing year 2000 worries. A sell rating is a rare thing, but Mayo's call is only having a muted effect on the banks this morning.
"They'll be looking down a buck or so on the open," said Dan Mathisson, head stock trader at
D.E. Shaw Securities
. "It doesn't look like they'll be down enough to bring the broader market down."
At 9 a.m. EDT, the
futures were up 3.2, about 4 above fair value and indicating a good open. The 30-year Treasury was down 5/32 to 92 15/32, putting the yield at 5.78%.
With investors wading through a flood of earnings reports, Tokyo stocks gained ground. It's become something of a bifurcated market, with domestic investors cherry-picking companies whose results have come in well, and foreign investors buying name-brand Japanese companies when prices drop. The
added 97.51 to 16,390.49.
Late-day futures-buying dragged Hong Kong stocks into positive territory. The
added 164.72, or 1.3%, to 12,436.86.
With most European markets closed for Whit Monday, and stocks lately trading light in any case, one might have expected today to be something of a snoozer in London. Not the case. The news that
Alliance & Leicester
Bank of Ireland
are in merger talks put a bid in financial stocks. The
was up 47.7 to 6400.8.
Monday's Wake-Up Watchlist
- Avis (AVI) is acquiring
Cendant's (CD) PHH and
Wright Express vehicle-management and fuel-card businesses in a transaction valued at $1.8 billion.
In other news:
Alliance & Leicester of Britain and Bank of Ireland confirmed they are in merger talks. The talks were first reported over the weekend in the
Amsted Industries, which is privately held, said today it has begun a $35-a-share tender offer for
Varlen (VRLN) .
Jo-Ann Stores (JAS.A) reported first-quarter earnings of 12 cents a share, down from the year-ago 15 cents, which excludes a charge.
Olivetti has emerged victorious in its long battle for
Telecom Italia (TI) .