Stocks could continue higher on back of tech, merger news. But, pressure to cash in may prevail.
September 3, 2003: 7:07 AM EDT
NEW YORK (CNN/Money) - Stocks headed for a flat to higher open Wednesday, as upgrades in the tech sector and reports of some likely mergers balanced out pressure on investors to cash in on gains from Tuesday's rally.
Futures were mildly positive in the early morning hours. With fair value added in, however, the markets were likely to do little else but tread water at the open. (Get latest futures reading here).
The markets chalked up major gains Tuesday, reaching levels not seen in more than a year. The Nasdaq rose 1.7 percent, closing at a 17-month high. The Dow Jones industrial average jumped 1.1 percent, while the S&P 500 added 1.4 percent. Both indexes closed at almost 15-month highs.
Those gains could lead to some profit taking Wednesday. But, economic and corporate news could also influence trading.
Investors awaited the July reading on construction spending, due out at 10 a.m. ET. Spending is expected to have risen 0.5 percent last month, compared with a 0.3 percent rise in June, according to economists surveyed by Briefing.com.
The Federal Reserve's "beige book," a snapshot of the how the economy is faring throughout the country, was set for release later in the day. The Fed's Open Market Committee will use the findings from the report to help make a decision on interest rates at its next meeting.
On the corporate front, two deals were reportedly set to be announced. According to news reports, private-equity firm Blackstone Group was heading an investment group's takeover of a French conglomerate Suez SA's water-treatment-supplies unit for roughly $4 billion.
Also, pharmacy benefit manager Caremark Rx (CMX: Research, Estimates) said it would buy rival AdvancePCS for $6 billion in stock, cash and debt.
Techs could get a lift Wednesday on the back of some sector upgrades. Credit Suisse First Boston upgraded its investment rating on the infrastructure software and enterprise software sectors to "overweight" from "market weight."
CSFB also boosted business software maker Siebel Systems (SEBL: Research, Estimates) to "outperform" from "neutral." Shares of Siebel rose 41 cents to $10.51 Tuesday.
Meanwhile, Wachovia raised its rating on Oracle (ORCL: up $0.56 to $13.39, Research, Estimates) to "outperform" from "market perform." The business software maker jumped 56 cents to $13.39 Tuesday.
Dow component General Electric (GE: Research, Estimates) also could help lift stocks, after getting an upgrade to "neutral" from "underweight" from J.P. Morgan before the open Wednesday. Shares of GE bounced 87 cents to $30.44 Tuesday.
Also, Merrill Lynch boosted its price target for AMR, parent of American Airlines, to $13 a share from $16 and added the company to its "Focus 1" list. Shares of AMR (AMR: up $0.66 to $11.66, Research, Estimates) jumped 66 cents to $11.66 Tuesday.
Stocks in Asia ended mostly higher. The Nikkei continued its run, posting a gain of 0.24 percent to 10,715.69. European markets also made gains in morning trading there.
Treasury prices inched higher, pushing the yield on the 10-year note down to 4.57 percent from 4.61 percent late Tuesday. The dollar slid against the yen, holding just above yesterday's 3-1/2 month low, and changed little versus the euro, which hit its lowest point in 4 1/2 months against the dollar.
Brent crude oil prices gained 11 cents to $27.63 a barrel in London, where gold prices dropped.
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