Perhaps it is the best of worlds.

IBM

(IBM) - Get Report

and

Dell

(DELL) - Get Report

announce a market-pleasing, multibillion-dollar pact just as it's become clear that no economic report could be as bad as what people have been imagining tomorrow's employment report will be. Hellooo, Dow 10,000.

Or maybe it's a tremendous head fake.

With major market indices trading near the highs of the day, this is the question confronting Wall Street. The action is euphoric. The

Dow Jones Industrial Average

was lately up 171, or 1.8% to 9446, while the broader

S&P 500

was higher by 17, or 1.4%, to 1245. The

Nasdaq Composite Index

was up 37, or 1.6%, to 2302. Big-cap tech stocks were doing even better -- the

Nasdaq 100

was up 2.3%.

Meanwhile, the

Russell 2000

was up 2 to 394,

TheStreet.com Internet Sector

index was unchanged at 521 and

TheStreet.com E-Commerce Index

was down 1 to 95.

Breadth was good, though volume was on the light side. On the

New York Stock Exchange

, advancers were beating decliners 1,600 to 1,128 on 411 million shares, while in

Nasdaq Stock Market

action, advancers led decliners 1,961 to 1,489 with 469 million shares changing hands.

For many on Wall Street, this is a bit too big a day for the stock market to be having on the eve of the February employment report, arguably the most important piece of economic data to come out in over a year.

"It's a set up for a bad downturn, because we're going to be overly enthusiastic going into tomorrow," said Courtney Smith, chief investment officer at

Orbitex Management

.

Economists think that there were about 250,000 jobs added in February, and that the unemployment rate stood at 4.3%. But the jobs report is frequently underestimated, and economists expectations have been, it's turned out, egregiously low lately. (

TheStreet.com

previewed the jobs report in a

story this morning.)

A jobs number as high as 270,000 has probably been priced into the bond market, according to Dana Johnson, head of capital markets research at

First Chicago Capital Markets

, and not many will raise an eyebrow if the unemployment rate ticked down to 4.2%.

"Seasoned bond traders know that there is track record for economists to underpredict March," said Johnson. Still, no matter what the number brings, "there will be a good, sharp reaction to this number."

Bond traders of all types, seasoned and otherwise, are pretty much sitting on their hands today. The 30-year Treasury lately was down 2/32 to 93 18/32, its yield at 5.70%. (For more on the fixed-income market, see today's early

Bond Focus.)

Smith thinks that as the day wears on, some of the market should work off some of the lithium high it got from the IBM/Dell deal and start to worry about tomorrow. "I think we'll see some profit-taking" toward the end of the day, he said.

The noise in the market is IBM/Dell and the jobs report. But it's easy to say that today's move is just the latest bounce in a market that's been stuck in a wide trading range since January.

"The market got a little oversold here," said Richard McCabe, chief market analyst at

Merrill Lynch

. "It got to the bottom of its two-month trading range and we're getting a little bounce."

But McCabe thinks that the market will eventually fall below the bottom boundary of the range, marked on the S&P at 1212 or so. "They'll break it on the downside and make a deeper correction than we've seen," he said.

Thursday's Midday Movers

By Heather Moore
Staff Reporter

IBM was climbing 6 7/8 to 173 5/8, off its session high of 177, and Dell was jumping 2 1/2 to 83 3/8, off its intraday high of 84 3/4, after confirming a strategic $16 billion, seven-year technology agreement. The deal calls for Dell to buy storage, microelectronics, networking and display technology from IBM for integration into Dell computer systems. Eventually, the deal may include IBM's copper, silicon-on-insulator and other technologies. The deal also calls for broad patent cross-licensing between the two companies and collaboration on the development of future product technology.

Retailers were generally rallying on reports of hearty February same-store sales.

  • Dayton Hudson (DH) was rising 2 1/8 to 65 1/2 on sales up 8.3%.
  • Dollar General (DG) - Get Report was rising 1 9/16, or 5.1%, to 32 on sales up 4%.
  • Goody's Family Clothing (GDYS) was falling 1/2 to 10 5/16 despite sales up 0.4%.
  • J.C. Penney (JCP) - Get Report was rising 1 5/8 to 37 15/16 despite sales down 0.4%.
  • Limited (LTD) was rising 11/16 to 37 15/16 on sales up 13%.
  • Neiman Marcus (NMG) was rising 13/16 to 25 3/4 on sales up 3.3%.
  • Sears (S) - Get Report was rising 2 3/8, or 5.9%, to 43 on sales up 0.8%.
  • ShopKo (SKO) was rising 3/16 to 31 1/16 on sales up 6%.
  • Staples (SPLS) was rising 1 5/8, or 5.8%, to 29 5/8 on sales up 10%. The company also posted fourth-quarter earnings of 22 cents a share, beating the 20-analyst view by 2 cents and moving ahead of the year-ago 16 cents.
  • Ann Taylor (ANN) was rising 1 13/16 to 40 13/16 on sales up 21.4%.
  • Wal-Mart (WMT) - Get Report was rising 1 9/16 to 88 15/16 on sales up 10.3%.

In other news:

Bluefly

(BFLY)

was down 2 3/8, or 15.1%, to 13 5/8 after entering a marketing agreement with

Excite

(XCIT)

calling for Bluefly's online store to be integrated throughout Excite.com, WebCrawler.com and the Excite co-branded channels of

Netscape's

(NSCP)

Netcenter sites through a combination of commerce, advertising and promotional programs. Excite was off 13/16 to 106; Netscape was off 1/16 to 76 1/8.

CheckFree

(CKFR)

was down 4 1/2, or 12.7%, to 31 after

Lehman Brothers

lowered the stock to neutral from outperform. Yesterday,

Intuit

(INTU) - Get Report

, lately up 2 13/16 to 90 11/16, filed suit against the company for allegedly violating a contract agreement.

France's

LVMH Moet Hennessy Louis Vuitton

(LVMHY)

was up 2 1/8, or 5.1%, to 43 3/4 after last night announcing it ended efforts to put a representative on

Gucci's

(GUC)

board. The company also said it canceled a special shareholders meeting slated for March 23. LVMH launched a hostile bid for Italy's Gucci earlier this year, but the company's stake in Gucci was lowered to 26% after Gucci instituted an employee stock option plan. Gucci was down 3/16 to 66 7/8.

MetroNet Communications

(METNF)

, Canada's largest facilities-based competitive local exchange carrier, was up 3 1/4, or 7.5%, to 46 7/16 after agreeing to merge with

AT&T's

(T) - Get Report

Canadian unit in a deal valued at $4.6 billion. AT&T was up 5/8 to 84.

Micron Technology

(MU) - Get Report

was up 2 5/16 to 54 15/16 after

Gruntal

upped the stock to strong buy from buy, saying recent weakness in the sector is providing a good buying opportunity.

RF Micro Devices

(RFMD)

was up 3 5/8 to 85 after last night announcing a 2-for-1 stock split.

Earnings/revenue movers

General Nutrition

(GNCI)

was up 1 3/16, or 10.9%, to 12 1/4 even after last night recording fourth-quarter earnings of 31 cents a share, 1 cent below the nine-analyst forecast and behind the year-ago 42 cents.

Hayes Lemmerz

(HAZ)

was down 2 5/16, or 9.5%, to 22 1/8 after posting fourth-quarter earnings of 31 cents a share, nowhere near the six-analyst outlook for 56 cents and repeating the year-ago figure.

International Game Technology

(IGT) - Get Report

was down 3 11/16, or 20.1%, to 14 5/8 after warning that, because of a slower rate of replacement sales and uncertain timing of new casino openings, it might miss 1999 earnings estimates. The 11-analyst forecast called for earnings of $1.54 a share vs. the year-ago $1.33.

Credit Suisse First Boston

slashed the stock to hold from buy.

Texas Instruments

(TXN) - Get Report

was up 3 1/16 to 95 1/16 after its CFO said at an analyst conference that he expects moderate revenue growth this year in the company's semiconductor business.