Rate rally on the line

Futures point to mixed open for stocks following the gains fueled by sharply lower interest rates.

June 2, 2005: 6:13 AM EDT

NEW YORK (CNN/Money) - Stock investors will be closely watching the bond market Thursday to see if the low interest rates can continue to lift equities.

U.S. stock futures were up slightly in early trading, but a comparison to fair value indicated a lower or flat opening for stocks.

U.S. stock markets are expected to open on time Thursday after a technical glitch ended trading on the New York Stock Exchange four minutes early Wednesday. Major U.S. indexes all closed up, fueled by lower interest rates from the bond market.

Treasury prices were slightly lower in early trading Thursday, lifting the yield on the 10-year note to 3.91 percent from the 14-month low of 3.89 percent reached late Wednesday. Prices soared, and yields fell, following a survey of manufacturing executives Wednesday showed slowing growth and a sharp drop in inflationary pressures.

Oil prices were lower in early trading Thursday ahead of the weekly U.S. fuel inventory report, which was delayed a day this week by the Memorial Day holiday.

The July light crude contract dipped 15 cents to $54.45 a barrel in electronic trading, while the July contract for Brent crude lost 17 cents to $53.10.

Major markets in Asia closed mixed Thursday, as indexes in Tokyo and Hong Kong fell while markets in Australia, South Korea and Taiwan gained. Major European markets were also mixed in early trading.

The dollar lost ground against on the euro after climbing to an eight-month high against the European currency late Wednesday as Dutch voters rejected a proposed European constitution. The dollar also retreated versus the yen.