Stock futures are slipping off earlier strength this morning and the major indices are poised for a dip at the open after yesterday's late afternoon profit-taking.

At 9:03 a.m. EDT, the

S&P 500 futures

were down 8.4 points, just over 7 points below fair value. The

Nasdaq 100

futures were sharply down 51 points, a sign of an early selloff.

"Futures are moving down this morning following yesterday's late afternoon selloff. Yesterday, the Dow almost cut its gains in half, though the Nasdaq held a little bit better," said Jim Benning, stock trader at BT Brokerage.

"I'm looking for a sloppy opening and wouldn't be surprised at any 100 point moves."

While Benning expects a drop today, he doesn't think we'll test new lows any time too soon.

"I think we've hit our lows for now," he said.

Some observers thought the market was safely back on solid footing, as steady positive action yesterday and late last week seemed to have wrung the nervous volatility out of the market. There was talk of an intermediate or temporary "bottom" and optimism about both tech and bricks-and-mortar companies.

But the specter of a 50-basis-point rate hike later this month is still haunting Wall Street. Remaining skittishness probably kept volume moderate yesterday, though Europe's May Day market holiday may have helped.

In any case, Wall Street may continue to keep a low profile ahead of this week's productivity and employment numbers and

Fed

boss

Alan Greenspan's

Thursday speech, where he could provide clues to his interest rate hike plans. 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.

Some investors may be re-thinking their rush to snap up

Microsoft

(MSFT) - Get Report

shares today, after shrugging off news of government wishes to split the company in two yesterday. Monday morning, Microsoft analysts tried to pin down price estimates for a divided company and came out all over the board. Microsoft shares closed up 3 11/16, or 5.3%, to 73 7/16 on the day.

Meanwhile, the clash continues between media warlords

Walt Disney

(DIS) - Get Report

and

Time Warner

(TWX)

: still no ABC on Time Warner. It is not entirely clear who did what to whom in this little melee, but both stocks were moderately lower at the close yesterday.

Other stocks to watch this morning include a couple of big names in the hotel business.

Marriott

(MAR) - Get Report

and privately held Hyatt announced this morning that they are creating a B2B hotel Internet supply company.

And earnings keep trickling in.

Today we'll hear from

Comcast

(CMCSK)

,

Emerson Electric

(EMR) - Get Report

and

Hilton Hotels

(HLT) - Get Report

.

AT&T

(T) - Get Report

already reported earnings of 54 cents a share this morning, beating the street by a penny.

The bond market was inching higher, with the 10-year note up 3/32 to 101 2/32 and yielding 6.274%.

Meanwhile, European investors were catching up after the May Day holiday amid talk of a merger between Frankfurt's and London's exchanges.

Frankfurt and Paris exchanges were broadly higher, though falling off earlier highs, with the

Xetra Dax

up 77.82 to 7492.50 and the

CAC

83.68 higher to 6503.40.

London's

FTSE 100

was shedding earlier gains, but still up 18.7 to 6346.1, as investors wait on the

Bank of England's

interest rate decision Thursday.

The euro was trading down off yesterday's close but mildly higher compared with earlier this morning at $0.9119.

Asian markets were a little listless and flat overnight, with technology, media and telecom plays providing the only real meat in Hong Kong and South Korea.

Hong Kong's

Hang Seng

index closed up 298.46 to 15,817.76, while South Korea's

Seoul Composite

moved up 27.20 to 752.59.

With a three-day holiday kicking off in Tokyo tomorrow, investors were already ducking out overnight and trading was light. Stocks edged off early highs, but Tokyo's

Nikkei

index ended up 36.28 points to 18,439.36.

The dollar weakened against the yen to 108.40 yen in Tokyo trading and was trading recently at 108.67 yen.

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