(Updated from 6:59 a.m. EDT)

Shares of

PaineWebber Group

(symbol)

are rocking in preopen trade. The stock was lately up 17 1/16 to 67, according to

Instinet

. The boost comes as Swiss financial group

UBS

(UBS) - Get Report

has offered to buy the U.S. brokerage firm in a cash and stock deal worth $10.8 billion.

According to UBS CEO Marcel Ospel, or whoever writes his press releases, "The combination of UBS's international reach and product range with PaineWebber's leading position in the U.S. market for affluent and high net worth individuals will create a premier global investment services firm."

The purchase price translates into about $73.50 a share and represents a premium of 47% over PaineWebber's closing price yesterday. For more on the planned merger, take a look at

TSC's

story from last evening.

After midsession trading, Germany's

Xetra Dax

was up 1%. France's

CAC 40

was ahead 0.8%, while the U.K.'s

FTSE 100

was off 0.5% (see today's

European Midday Update for more). Japan's

Nikkei 225

lost 0.9% overnight, while Hong Kong's

Hang Seng

rose 1.1% (see today's

Asian Markets Update for more).

The

S&P 500 futures on

Globex

lately were up 9.1 to 1503.8, about 8 points above

fair value as calculated by

Prudential Securities

, and indicating a strong open. The thinly traded

Nasdaq 100

futures were higher 83.5 to 3865, about 75 points above fair value as calculated by

TheStreet.com

.

Today's big volume mover will be

Yahoo!

(YHOO)

, which last night beat Wall Street's earnings estimates by 2 cents a share. In early action, shares of Yahoo! were up 14 to 119 1/2, according to Instinet, with 40,000 shares changing hands. The stock last traded at 119.75 on

Island

, which uses decimal pricing.

Earlier: PaineWebber Soars Overseas on UBS Deal

LONDON --

Deutsche Telekom's

(DT) - Get Report

merger machinations took a back seat Wednesday morning to the news that

PaineWebber

(PWJ)

had finally veered from its independent stance and agreed to sell itself to

UBS

(UBS) - Get Report

, the Swiss banking group.

PaineWebber is the fourth-largest U.S. brokerage and one of the largest to remain independent in the face of consolidation among brokers and investment bankers to form mammoth financial services groups along the lines of

Citigroup

(C) - Get Report

.

The deal would value PaineWebber at $10.8 billion, or $73.50 a share, nearly a 50% premium over Tuesday's closing price of 49 15/16. Wednesday in Germany PaineWebber shares soared 26.50 euros, or 55.2%, to 74.50 euros ($70.77), while UBS dropped 8 euros, or 5.1%, to 148 euros. (Like many U.S. companies, PaineWebber shares are also listed on some foreign exchanges.)

"It's a very good deal for UBS," said Jim McCabe, a fund manager with

Capel Cure Sharp

in London, who focuses on U.S. stocks. (His firm doesn't own shares of PaineWebber.) "UBS, through

Warburg

and

the former

Dillon Read

, has a reasonable institutional business in the U.S., but it doesn't have a great retail business and that's what PaineWebber brings to them."

On the earnings front, more evidence of how jumpy investors have become, particularly in technology and Internet stocks, was visible yesterday with

Yahoo!

(YHOO)

. The shares traded down 4 1/2, or 4%, to 105 1/2 Tuesday as investors were nervous they'd receive bad news during the company's conference call after the market closed.

Instead, investors were treated to a humdrum conference call and results that exceeded analysts' estimates. The company earned 12 cents a share on revenue of $270.1 million, compared with 5 cents a share on revenue of $128.5 million a year earlier. The earnings beat analysts' expectations by 2 cents.

Yahoo! shares soared in

after-hours trading and continued to gain steam Wednesday in Europe. Yahoo! was up 18.70 euros, or 17.4%, to 125.95 euros.

"Everybody's so worried that they're going to get a negative comment out of conference calls that they're jumping before the news," McCabe said.

One earnings report to watch today will be

Motorola

(MOT)

, which is expected to earn 23 cents a share, according to analysts polled by

First Call/Thomson Financial

, compared with 12 cents a year earlier.

Jeffrey Schlesinger, an analyst with

UBS Warburg

, expects Motorola's results to be in line with consensus. Soft spots, however, could be the mobile phone business, which may not show the margin improvement analysts were expecting; personal communications, which could see unit volume and revenue fall short; and PCS, which saw weaker orders. Schlesinger rates the shares a buy. (It couldn't be determined whether his firm has performed underwriting for Motorola.)

Motorola shares jumped 1.10 euros, or 3.12%, to 36.30 in Germany.

At 6:30 a.m. EDT, the September

S&P 500 futures were up 8.6 points to 1503.3, or 7.7 points above

fair value as calculated by

Prudential Securities

, indicating a solidly positive open. The

Nasdaq 100

futures were 68.5 points higher to 3850, about 60 points above fair value as calculated by

TheStreet.com

and also indicating a bullish open for large-cap tech stocks. Fair value helps to determine the tone of futures trading, often a good indication for how the securities market will open.