Stocks Look to Open Firmer

Publish date:

Stocks are set to open higher in what looks like another muddled day of trading on Wall Street.

The news from overseas is somewhat ambiguous, and



last night is being mitigated by the company's warning this morning that its third-quarter numbers will look like the second quarter's. Overseas markets were generally good, but the yen weakened against the dollar overnight after Japanese Prime Minister

Ryutaro Hashimoto

did not announce the kind of sweeping tax cuts some had hoped he would in an after-the-close campaign speech. And a report in

The New York Times

suggesting that the

International Monetary Fund

may be willing to provide only $5.6 billion in new loans to Russia -- well below the $20 billion some say they need -- has gotten some investors nervous.

"This stuff coming out of Japan, out of Russia, all these things are just very uncertain for the market," said Bill Allyn, head of block trading at


. "The bond market and the stock market have been decoupled for a while here. I think today the factors that are contributing to a bond market rally are not good for the stock market."

But the market looks set to move into positive column this morning. At 9 a.m. EDT, the

S&P 500

futures were off 0.70. They closed above fair value last night, indicating a positive open. Dollar/yen was up 1.18 to 139.74, though dollar strength isn't as much of a negative for stocks as it was just a few days ago. With campaign rhetoric rocking currency trading, market participants realize that dollar/yen movements are relatively unimportant at this point. The yen and stocks likely won't return to trading in lockstep until after Sunday's upper-house election in Japan. The 30-year Treasury bond was riding higher on the back of that dollar strength. It was up 7/32 to 107 20/32, dropping the yield to 5.59%.

Japanese stocks advanced, with the


adding 114.69 to close at 16,530.97 on hopes that Hashimoto's speech would be a bit bolder than it was. Truth be told, it wasn't so bad -- the prime minister, though he gave no indication of what their scope should be, or where the cuts should come from, did suggest that he favored tax cuts.

Indeed, it looks like the

Liberal Democratic Party

is ready to cut taxes, but Japan's reform efforts may be thrown into disarray if the LDP does not successfully defend its 61 upper-house seats this Sunday. Should that happen, Hashimoto may be forced to step down, putting Japan's so-called total plan on hold as LDP members jockey for power in the new government. Recent polls suggest that whether or not the LDP will be able to defend its seats is too close to call.

Hong Kong stocks, trading almost exclusively on the news out of Japan these days, ended higher in anticipation of Hashimoto's speech. Volume remains thin, with many investors riding the pine ahead of Sunday's Japanese elections. The

Hang Seng

finished at 8629.18, up 185.00.

European stocks were mixed. In Germany, the


closed up 33.83 at 5994.81. In electronic trading, the

Xetra Dax

was at 6001.45. The French stock market was shifting back and forth across the flat line. The


was down 3.81 to 4329.27. In London, the


was down 10.9 to 5992.5.

General Motors



:NYSE) and the

United Auto Workers

entered marathon negotiations last night, and are reportedly close to ending the strikes at two Flint, Mich., parts plants that have stalled GM's production across the board. But

The Wall Street Journal

reports that GM wants the UAW to pledge no further strikes as part of any settlement.