Stocks Poised to Rebound From Thursday's Retreat

There's been no push from Asia, but stocks appear ready for a Friday-morning rally.
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It looks like yesterday's selling will give way to some strength this morning.

Stocks are poised to nudge higher in the early going. At 9:05 a.m. EDT, the

S&P 500

futures were up 1.6, nearly 4 points above fair value and indicating a positive open.

It's not clear how much stocks will be able to extend any upside momentum they build, though there are more than a few people who think that stocks can still run higher. Traders without a crystal ball might lack the incentive to take on long positions ahead of next week, when the

Chicago Purchasing Managers

and

National Association of Purchasing Managers

indices will provide the first real clues about the course interest rates will take this fall.

Suffice it to say that a lot of players are still on holiday. Volume should be moderate at best, keeping the market primed for another volatile swing or two.

"The market will continue to be choppy" through today and into next week, said Peter Boockvar, equity strategist at

Miller Tabak Hirsch

.

On a short-term technical level, the market's on fairly precarious footing. Boockvar noted that short-term support on the

Dow Jones Industrial Average

is at 11,194 -- about 4 points below yesterday's close. "With bonds down, anything could happen today."

The 30-year Treasury was coming under some pressure this morning as traders extended

yesterday's profit-taking. The long bond was lately off 5/32 to 102 31/32, its yield rising to 5.912%.

Today's July personal income and consumption data aren't moving the market much. The

Commerce Department

reported that personal income grew 0.2%, below the 0.5% clip expected by economists in the

Reuters

poll and down from June's 0.7% pace. Personal spending increased by 0.4%, lower than the expected 0.5% but up from the previous month's 0.3% growth rate.

International markets weren't providing any support for U.S. stocks. Overnight in Tokyo, stocks slumped for the fourth straight day in very light trading ahead of next week's Japanese industrial production and employment reports. The

Nikkei

fell 66.92 to 17,599.37.

In the meantime, Consumer Price Index figures gave Japanese investors mixed signals on the state of the economy's deflationary pressures: Consumer prices rose 0.3% for Tokyo in August but fell a greater-than-expected 0.4% nationwide. At the same time, the government said that wage-earning household spending increased 1.8% in July, the second consecutive monthly jump.

The dollar managed to hold a narrow range against the yen overnight despite ill-founded rumors that a Japanese newspaper was to quote

Treasury

Secretary

Larry Summers

expressing his dismay over the recent strength of the yen. The report never appeared. Vague talk of an emergency

G7

deputies meeting this weekend also failed to move the dollar much against the yen; the greenback was lately quoted at 111.65 yen.

In Hong Kong, traders took profits on stocks ahead of the release of gross domestic product data and the

Hong Kong Association of Banks

meeting. As widely expected, the HKAB decided after the close to match the U.S.

Federal Open Market Committee's

rate hike on Tuesday by raising deposit rates 25 basis points to 3.75%. Second-quarter GDP rose 0.5% from the previous year, confounding expectations for a sixth straight quarter of contraction.

The

Hang Seng

dropped 225.25, or 1.7%, to 13,383.13.

In Europe, after opening lower on the heels of yesterday's slump on Wall Street, markets were rebounding modestly toward midday along with U.S. stock futures. London's

FTSE

was up 12.0 to 6395.9, while the Paris

CAC

was up 14.41 to 4643.78. Frankfurt's

Xetra Dax

was up 20.20 to 5409.54.

Friday's Wake-Up Watchlist

By

Brian Louis

Staff Reporter

Mergers, acquisitions and joint ventures

Medtronic

(MDT) - Get Report

is buying

Xomed Surgical Products

(XOMD)

for $800 million in stock.

Viatel

(VYTL)

is acquiring

Destia Communications

(DEST) - Get Report

in a stock swap that values Destia at $18.63 a share. It closed yesterday at 13 15/16.

Analyst actions

Lehman Brothers

downgraded

Ameritrade

(AMTD) - Get Report

to outperform from buy.

SG Securities

raised its price forecast for this year and next and repeated its buy recommendation on

BP Amoco

(BPA)

and

Shell Transport & Trading

(SC) - Get Report

,

Reuters

reported.

Lehman downgraded

E*Trade

(EGRP)

to outperform from buy.

Merrill Lynch was out with positive comments on

Hewlett-Packard's

(HWP)

new CEO,

CNBC

said.

Morgan Stanley Dean Witter

increased its price target on

Intel

(INTC) - Get Report

to 95 from 80.

Credit Suisse First Boston

upgraded

Intuit

(INTU) - Get Report

to strong buy from buy. The company reported a fourth-quarter loss of 26 cents a share, better than the

First Call

11-analyst estimate of a 33-cent loss, but swinging from the year-ago profit of 3 cents.

Morgan Stanley downgraded

Powertel

(PTEL)

to outperform from strong buy.

PaineWebber

downgraded

Sapient

(SAPE)

to attractive from buy.

Miscellany

ABC's

entertainment division president, Jamie Tarses, has resigned. ABC is owned by

Disney

(DIS) - Get Report

.

An expanding number of analysts think

Chevron

(CHV)

should buy

Occidental Petroleum

(OXY) - Get Report

as a way of resolving a legal battle between the two companies, the Heard on the Street column in

The Wall Street Journal

reports. A few years ago Chevron lost a nearly $1 billion legal battle with Occidental and is now running out of appeals on the matter, the column said.

A California judge hacked a product-liability judgment against auto titan

General Motors

(GM) - Get Report

to $1.2 billion from $4.9 billion.

Merrill Lynch's

chief investment strategist, Charles Clough, who in recent years has been bullish on bonds but negative on stocks, recently told his supervisors he's leaving the firm at year's end and hopes to launch an investment boutique, the

Journal

reported. The

Journal

reported that Merrill and Clough said the move wasn't forced and that his supervisors tried to get him to stay on.

Toys R Us'

(TOY)

CEO Robert Nakasone has resigned over "differing views regarding the direction of the company." The toy company said its chairman and ex-CEO, Michael Goldstein, will act as CEO temporarily, until its board can find a permanent replacement.

The Inside Wall Street column in

Business Week

, penned by Gene Marcial, says some investors are excited over

Concord Camera's

(LENS)

prospects. The column says the company is poised to make a digital camera to be developed with

Hewlett-Packard

(HWP)

and that Concord will also introduce a product that can transmit pictures to a cell phone, a product that's being developed by a major European wireless-phone company.

Elsewhere, Charles LaLoggia, editor of

LaLoggia's Special Situation Investor

newsletter, is convinced

Middlesex Water

(MSEX) - Get Report

will attract one of the major water utilities to take it over, the column says.

In a final item, the column says that some money managers believe

New Century Financial

(NCEN)

is a takeover candidate.