Wall St. of worry

U.S. markets set to open flat or slightly off as investors watch higher oil, await Fed minutes.


April 12, 2005: 7:44 AM EDT

NEW YORK (CNN/Money) - A rebound in oil prices could make it difficult for stocks to get traction Tuesday morning ahead of the latest signal from the Federal Reserve about the thinking of the central bank's policymakers.

U.S. stock futures were slightly off in early trading, indicating a lower or flat opening for stocks.

Oil prices, which ended their week-long decline and started to climb Monday, continued to rise in early trading Tuesday.


The May light crude contract gained 19 cents to $53.90 a barrel in electronic trading, while the May contract for Brent crude rose 28 cents to $53.49.

Michael Carty, stock market strategist, New Millennium Advisors, said that while oil has been a constant concern for investors recently, he thinks the weakness in the futures is a sign that many traders are waiting to see the minutes of the Federal Reserve's March meeting, due to be released at 2 p.m. ET.

He said investors are worried that the Fed minutes will show a growing concern about inflation risks, raising the expectation of a pick up in the pace of interest rate hikes at future meetings.

"People are concerned about that. It's keeping them at bay," he said. "We had very low volume yesterday, and since we're still not in the full swing of earnings, there's very little out there to lead to buying."

Major markets in Asia closed mixed Tuesday. Major European markets were mixed in early trading.

Treasury prices were slightly lower, lifting the yield on the 10-year note to 4.44 percent from the 4.43 percent level late Monday.

The dollar gained slightly on the euro and the yen.

The dollar could see new downward pressure after the February trade report Tuesday. Surveys of economists by both Briefing.com and Reuters have consensus forecasts for a $59 billion trade gap for the month, up from $58.3 billion in January.

But a third of the 21 economists surveyed by Reuters expect the gap to top the $59.4 billion figure from November, the current record.

In corporate news, the Wall Street Journal and New York Times both reported Thursday that the board of MCI (Research) is planning to seek an improved offer from Verizon Communications (Research), after Verizon agreed to pay significantly more to MCI's largest shareholder than the $23.10 a share price that the MCI board has previously accepted.