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MARKET PREVIEW: Dropping oil prices may fuel rally

As oil priced settle down, techs may rev up their engines again Thursday. Asian and European markets were mixed, and the Dow is set to open slightly lower.

U.S.

As oil prices drop, the broader markets might regain confidence. Oil prices dropped by about $2 a barrel, or 6 percent, Wednesday afternoon. Procter & Gamble Co., whose earnings warning Tuesday sparked an almost 400-point dip in the Dow Jones, and a subsequent slump for techs, had cited increased oil prices as a factor in its reduced profit forecast.

Wednesday's Beige book report, a summary of regional economic conditions released by the Federal Reserve, should also reassure techs. The report showed inflation remains lethargic, though wage pressures continue to build.

The ongoing saga of Deutsche Telekom's bid for U.S. telecoms group Qwest (NYSE: Q) has a new twist Thursday; the Wall Street Journal reported provided that Deutsche Telekom has made offers to buy it and U S West (NYSE: USW) in a deal that could exceed $100 billion. The news sent both stocks up in after-market trading.

Expect the following technology stocks to be among Thursday's most actively traded issues: Fatbrain.com, Redback Networks, NaviSite and 24/7 Media.

Technology stocks shrugged off a slow start Wednesday to post strong gains as the Nasdaq composite moved up 49 points to 4,897.29. The Dow Jones industrial average gained 61 points to end at 9,856.53.

At the Bell

The Dow Jones industrial average may open about 9 points lower. The Standard & Poor's 500 index for June futures contracts was down 1.2 points to 1365 at 7:31 a.m. EST in 24-hour electronic trading.

The Inter@ctive Week @Net Index was down 7 to 657.17.

Asia

Trading in Asia was mixed. The Nikkei 225 lost 0.53 percent to 19,662, Singapore's Strait Times index gained 0.47 percent to 2,802 and Hong Kong's Hang Seng was down 1.75 percent to 17,637.

Europe

European markets were also moving in different directions. London's FTSE 100 rose 1.95 percent to 6,536. The CAC 40 in Paris gained 1.00 percent to 6,408 and the Xetra DAX in Frankfurt lost 0.78 percent to 7,925 at 7:01 a.m. EST.

Reuters contributed to this report.

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