Bonds are rebounding, and that should put a bid in stocks this morning.

But that doesn't mean it isn't awfully dangerous out there. Bond traders are characterizing the overnight move in the Treasury market as little more than a dead-cat bounce.

"It's just stabilization overnight after a free-fall," said Mike Cloherty, senior economist at

Credit Suisse First Boston

.

There are also some technical factors supporting the market. It is the last day of the month, and in months in which the 30-year is auctioned, there is normally month-end buying by indexers. Still, "the month-end buying hasn't been active in past Februarys," warned Cloherty. "I don't know if that's enough to save us." Like many economists, Cloherty worries that a raft of data next week will show little signs of a slowdown in the economy. Today's Treasury gains could be short-lived.

At 9 a.m. EST, the 30-year was up 1 6/32 to 95 12/32, dropping the yield to 5.58%.

"The nice thing is they found a bid yesterday" afternoon, said Todd Clark, head stock trader at

Charles Schwab

. That should give support to stocks, said Clark -- at least initially. He does worry, however, that later in the day asset allocators may decide to up their bond holdings. "You might see some money siphoned out of stocks," he said. "You might see some program selling."

The

S&P 500

futures were up 6.7, fractionally above fair value and suggesting some strength at the open. Given the move in bonds, however, the futures may be understating it.

Tokyo stocks gave back most of yesterday's gains as investors got cautious ahead of the weekend. This despite renewed dollar strength after deputy

Treasury

secretary

Larry "The Hammer" Summers

expressed doubts over Japan's economic straits. The

Nikkei

shed 102.91 to 14367.54.

TheStreet.com's

Marc Chandler

examined Japan's outlook in a piece this morning.

What, pray tell, would

Hong Kong Disneyland

look like? This is what Hong Kong investors were wondering today on the back of a report in yesterday's

South China Morning Post

that

Disney

is

(DIS) - Get Report

is considering opening a theme park on the island. With property shares such a major component of the stock market, the idea that there will be a smaller supply of real estate was welcomed by traders. The

Hang Seng

added 200.42, or 2.1%, to 9858.49.

Down earlier, Europe's major bourses were coming back. In Frankfurt, the

Dax

was down 21.78 to 4936.80. In Paris, the

CAC

was off 23.16 to 4129.4. And in London, the

FTSE

was up 10.6 to 6217.1.

Friday's Wake-Up Watchlist

By

Brian Louis

Staff Reporter

Philips Electronics

(PHG) - Get Report

made an unsolicited $777 million bid for chip concern

VLSI

(VLSI)

. Philips proposed paying $17 a share in cash, representing a chunky premium over VLSI's Thursday close of 10 3/4.

British Aerospace

is in serious talks to buy

Construcciones Aeronauticas

of Spain,

The Wall Street Journal

reported, citing people familiar with the development. Both companies are members of the

Airbus Industrie

consortium.

The management of

Kuwait Petroleum

, the largest shareholder in

Hoechst

(HOE)

, is said to be divided over whether to support the proposed merger between Germany's Hoechst and France's

Rhone-Poulenc

(RP) - Get Report

, the

Financial Times

reported. The newspaper reported that Kuwait Petroleum holds a 24.5% stake in Hoechst, which puts it in a position to thwart the plan when Hoechst shareholders vote on the merger on May 4.

In the latest act in the

Olivetti

-

Telecom Italia

(TI)

soap opera, Telecom rejected Olivetti's revamped $58 billion takeover bid and said it is pondering a merger with its cellular phone division,

Telecom Italia Mobile

, in an effort to fend off Olivetti. A merger with its cell phone unit would balloon the value of Telecom and make it more difficult for Olivetti to acquire Telecom.

In other news (earnings estimates are from

First Call

):

Morgan Stanley Dean Witter

raised its price target on

Anheuser-Busch

(BUD) - Get Report

to 90 from 80.

Lycos

(LCOS)

posted a loss of 3 cents a share, 1 cent better than the 19-analyst forecast but below the year-ago profit of a penny.

The

New York Stock Exchange

is looking into ways to trade the biggest stocks on the

Nasdaq Stock Market

under the NYSE rubric, the

Journal

reported, citing people familiar with the NYSE plans. Among the routes the Big Board may take: build its own electronic trading network, buy or ally with an existing network, or arrive at some sort of joint venture with Nasdaq, the article says. Of course, the Big Board, in the end, could do nothing, the article pointed out.

Novell

(NOVL)

reported first-quarter earnings of 8 cents a share, in line with the seven-analyst forecast and above the year-ago 4 cents.

Schering-Plough

(SGP)

said it received the go-ahead from a European committee for approval of its

Rebetol

drug to treat hepatitis C. Hepatitis C is a potentially deadly liver disease. Also, the company said the committee received approval of its drug

Integrilin

, which is used for the prevention of myocardial infarction. The opinion of the committee, the Committee for Proprietary Medicinal Products of the European Agency for the Evaluation of Medicinal Products, serves as the basis for a

European Commission

approval, which is typically issued in about four months.

Zeneca

(ZEN) - Get Report

sued

Eli Lilly

(LLY) - Get Report

, alleging that Lilly unlawfully promoted its osteoporosis drug

Evista

for use in preventing breast cancer, the

Journal

reported.

The

oft-off-the-mark Inside Wall Street column in

Business Week

features bullish reports on

America Online

(AOL)

,

NetSpeak

(NSPK)

and

Noble International

(NIL)

.

Michael Wallace of

Warburg Dillon Read

figures AOL's stock is worth at least 110 based on an estimated value per subscriber of $30 over the next two years and a subscriber base reaching 45 million by 2003, the column says. AOL currently has 17 million subscribers and projects 19 million by the end of the year, the column says. Based on AOL's price-to-sales ratio of 20, based on estimated sales in calendar year 1999,

Standard & Poor's

analyst Mark Cavallone figures AOL stock will hit 115 this year. The stock closed Thursday at 87 3/16.

The column also reports there are rumors on Wall Street that AOL may well be the target of the likes of

AT&T

(T) - Get Report

for a merger of near-equals, but analysts say AOL's big market cap would deter any potential partner.

The column reports there is speculation that

Motorola

(MOT)

may expand its stake in NetSpeak -- currently at 32% -- or make an offer for the whole company. Robert Goldman of

Josephthal

thinks Motorola will need to buy NetSpeak sooner or later for its Net telephony technology, the column says. An official from Motorola declined to comment, while an official from NetSpeak said the company did not comment on market rumors, the column says.

Finally, Noble International is the subject of a bullish piece in the column.