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THE DAY AHEAD: Market Preview

The mugging of stocks will continue on Wednesday as Wall Street keeps its eyes out for the Inflation bogeyman. Asia gained and Europe edged higher. The Dow is set to open slightly in the negative.

U.S.

Stocks across the board are likely to continue to lose ground later today on concerns about inflation. New home sales for April are due out at 10 a.m. EST from the Department of Commerce. Analysts are expecting sales to rise to 915,000 from 909,000 in the previous month. The sales indicate the strength in the confidence of consumers to put down money and start a mortgage. Homes are typically a household's largest investment. The confidence among consumers is the main reason for the economy's sustained prowess, since two-thirds of the Gross Domestic Product, the main gauge of a nation's economic health, is made up of consumer spending.

Initial jobless claims for last week are due out Thursday. But the real number to look out for will be the following day. For Friday, non-farm payroll data for May will be reported at 8:30 a.m. EST. If the growth rate for last month exceeds 2.75 percent, it could put an even greater damper on stocks. About one-third or greater of the cost to make a particular product is labor. Labor costs have remained in check for quite some time, which has kept corporate profits healthy and the economy in check. This isn't likely to be sustainable and Greenspan has repeatedly warned that rising labor costs from such a tight labor market could foster inflation.

Some other dates to mark on the calendar: June 16 - the second revision of the Consumer Price Index for the first quarter. The last revision of the CPI, the average cost of consumer staple items, worked to confirm Wall Street's worries that the economy was beginning to overheat. The next revision is likely to drive that point home further. The following day, June 17, Federal Reserve chairman Alan Greenspan testifies before Congress. The topic isn't important. Wall Street will hang on every word to see exactly how "biased" he has become towards raising interest rates.

Among Wednesday's stocks to watch: AdForce loses a customer, Adobe Systems is holding an analyst call this morning, AOL buys some music makers, Comverse Technology beat estimates, McLeodUSA makes a purchase and Newbridge Networks came up short in its fourth quarter.

On Tuesday, Internet stocks were routed again but blue-chip stocks helped the Dow reverse its fortune in late trading. The Dow closed up 37 points to 10,596.26 while the Nasdaq composite shed 58 points to close at 2,412.55.

The Inter@ctive Week @Net Index lost 15 to 282 on Tuesday.

At the Bell

The Dow Jones industrial average is set to open unchanged. The Standard & Poor's 500 index for June futures contracts was unchanged at 1,295.6 at 7:20 a.m. EST in 24-hour electronic trading, are indicating no change in the global bellwether.

Asia

Asia made modest gains. The Nikkei 225 in Tokyo edged up 0.06 percent to 16,417, the Seoul composite in South Korea gained 2.82 percent to 775, Singapore's Strait Times index added 0.97 percent to 1,927 and Hong Kong's Hang Seng advanced 0.77 percent to 12,458.

Europe

European markets were little changed in morning trade. London's FTSE 100 rose 0.87 percent to 6,303, the CAC 40 in Paris crept 0.04 percent higher to 4,315 and the Xetra DAX in Frankfurt gained 0.08 percent to 5,014 at 7:39 a.m. EST.