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Stocks Setting Up for a Snapback

A lot of stocks have room on the upside, if only investors could fight off the urge to sell any strength outside the tech sector.

Stocks are setting up for an early snapback from Friday's big


The market: Join the discussion on


Message Boards. At 9:05 a.m. EST, the

S&P 500

futures were up 3.6, more than 7 points above fair value and indicating a pretty good rally at the open for the broad big-cap market. The

Nasdaq 100

futures, meanwhile, were lately up 30.5 to 4023, a strong indication for technology stocks.

"It's hard to explain why," said Bill Meehan, chief market analyst at

Cantor Fitzgerald

. "We did bounce back late in the session Friday. The NDX futures filled in a gap in the chart and ended the day on a positive note."

"But as everyone knows," Meehan continued, "any pullback in the Nasdaq Composite is a chance to make some easy dough. So we'll prop them up in the morning."

So far, the forces that informed the market at the start of the year -- the tug of war between new inflows and profit-taking -- have yielded some convincing testimony for the technical analyst's belief in the natural persistence of trends. The intense run-up this year in small-cap proxies like the

Russell 2000

, much of whose juice is provided by its Internet components, may have obscured the extent to which bargain-hunters have been losing out to performance-chasers and momentum investors.

Time after time, investors have sold into any rally in the market's more modestly valued sectors. And each time, they've sent that cash back into tech and biotech.

Hence all that wiggle room on the upside for the

Dow Jones Industrial Average

, which enters today's session in official correction territory, about 11% off its high for the year. In the long arc, the Dow's considerable exposure to financial and cyclical stocks has kept it flat for the past 10 months. But now stocks like







International Paper



United Technologies





have the Dow in what's starting to look like a general free fall.

The bond market isn't doing much of anything this morning, with the 30-year Treasury lately down 3 ticks to 99 20/32, putting its yield at 6.277%. The 10-year note, meanwhile, was down 5/32 to 99 5/32, yielding 6.617%. No major data are scheduled for release.

Crude oil for March delivery at the

New York Mercantile Exchange

was lately trading up 31 cents at $29.75.

The large European bourses were mixed to lower in early afternoon trading. The Paris


was off 45.46, or 0.7%, to 6241.55, while Frankfurt's

Xetra Dax

was up 18.60 to 7630.15. London's


was down 85.2, or 1.4%, to 6108.1.

The euro was lately trading at $0.9861.

Asian markets moved lower overnight.

In Hong Kong, the

Hang Seng

sank 191.34, or 1.1%, to 17,188.96. The index's downside was limited by a 22% gain in constituent

Cable & Wireless HKT


, as excitement continued over the prospect of a bidding war for the company between

Singapore Telecommunications


Pacific Century Cyberworks




sank 153.56, or 0.8%, to 19,556.46. The dollar lost ground against the yen, falling to around 108.10 yen in Tokyo trading on position adjustments from foreign players. The dollar was lately sitting at 108.36 yen.

South Korea's


sank 42.35, or 4.44%, to 910.87 as the recent strength in the won heightened local anxieties over a slowdown in economic growth.

This weekend,

Ford Motor



plans to bid against

General Motors



Daewoo Motor's

assets, for which GM has already offered $6 billion.

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