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Market preview: politics, Greenspan on deck

Shifting alliances in the Senate and an appearance by the Federal Reserve chairman catch investors' attention.

Political shifts in the Senate and an appearance by Alan Greenspan will catch investors' attention Thursday. The Dow is set to open flat to slightly higher.

The Nasdaq fell sharply Wednesday after six straight sessions of gains. Analysts placed blame on a dearth of news and worries about the Democrats gaining control of the Senate.

Power could shift to the Democratic Party as a result of Vermont Sen. James Jeffords' departure from the Republican Party, expected to be announced just as U.S. markets open. If, as expected, Jeffords becomes an Independent, it would give the Democratic Party control of the Senate for the first time since 1994. The speculation about Jeffords' move hurt oil, drug and tobacco stocks Wednesday.

Investors could also be anxious about Federal Reserve Chairman Alan Greenspan's scheduled address to the Economic Club of New York Thursday night. At the gathering, he is expected to field questions from economists--and could comment on the Fed's current thinking on monetary policy.

Stocks to Watch

• Sawtek could slide after issuing a profit warning Tuesday night, blaming slowing cell phone sales. The maker of electronic components for the wireless industry said it will have lower than expected earnings for the quarter ending June 30. The company projects it will earn 6 cents to 8 cents, not even half of what First Call's consensus estimate had been--18 cents a share.

• TriQuint Semiconductor could suffer as a result of the news. The stock fell as low as $22.55 in after-hours trading from its close of $24.81 in regular trading. The semiconductor maker agreed earlier this month to buy Sawtek Inc. for $1.29 billion in stock.

• Electronic Data Systems, a computer-services company, said it agreed to acquire Structural Dynamics Research for $950 million in cash and will buy the 14 percent of Unigraphics Solutions that it doesn't already own for $170 million in cash. The company plans to merge the two into a new business at EDS.

• Synopsys topped estimates on strong sales in its second quarter as it reported more success in shifting its customers to a subscription revenue model. The maker of software for designing semiconductors reported revenue of $163.5 million and a profit of 24 cents a share before goodwill. On that basis, it was expected to earn 20 cents a share by First Call. The company also projected revenue of between $173 million and $178 million and pro forma earnings per share of between 25 and 29 cents for the current quarter, in line with the current consensus expectations.

At the Bell

The Dow Jones industrial average may open 9 points lower. The Standard & Poor's 500 index for June futures contracts was off 1.00 point to 1291 at 4:15 a.m. PDT in 24-hour electronic trading.

Reuters contributed to this report.