Stocks Head to Higher Open

Stocks were poised to open higher Monday after several reports of potential corporate deals, including speculation Washington Mutual Inc. will get a $5 billion investment from private equity firms.

The nation's largest thrift is in talks with buyout shop TPG Inc. about a possible capital injection, according to The Wall Street Journal. The company, which has suffered big losses tied to subprime mortgages, would become the latest U.S. financial institution to reach such a deal.

In addition, Microsoft Corp. gave Yahoo Inc. a three week deadline to agree to a takeover, or Microsoft would launch a proxy fight for control of the company. Yahoo said Monday the deal isn't in the best interests of its shareholders, and called the proxy threat counterproductive.

And Swiss pharmaceutical maker Novartis AG said it will spend about $38 billion in a two-step bid for a majority stake in U.S. eye-care company Alcon Inc.

Earnings season unofficially begins after the closing bell when Alcoa Inc., the world's third-largest aluminum producer, is scheduled to release first-quarter results.

Dow Jones industrial average futures rose 69, or 0.70 percent, to 12,679. Standard & Poor's 500 index futures advanced 11.90, or 0.87 percent, to 1,383.80. Nasdaq 100 index futures rose 15.75, or 0.84 percent, to 1,885.50.

Bond prices fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.52 percent from 3.47 percent late Wednesday.

Light, sweet crude rose $1.16 to $107.39 in premarket electronic trading on the New York Mercantile Exchange. Gold was higher, and the dollar was mixed against other major currencies.

There were no major economic reports scheduled to be released during the session.

Overseas, Japan's Nikkei stock average rose 1.18 percent. Britain's FTSE 100 added 0.95 percent, Germany's DAX index rose 0.32 percent, and France's CAC-40 added 1.13 percent.

US Stocks Head for Lower Open

U.S. stocks headed for a lower open Wednesday after orders for big-ticket manufactured goods declined for a second straight month in February.

The Commerce Department report that durable goods orders fell 1.7 percent last month -- rather than rising as the market expected -- appeared to rekindle some unease about the health of the economy.

The report comes a day after stocks generally extended their gains after two sessions of sharp advances. The market's recent ability to add to its climb has been greeted by bullish investors as a sign that its troubles are on the mend; Wall Street hadn't succumbed to a recent pattern of selling off after such a strong move upward. The Dow Jones industrial average has risen more than 425 points in the past three sessions.

But the durable goods numbers made it unclear whether the rally would hold.

Government figures are also due after the opening bell on new home sales.

Dow Jones industrial average futures fell 38, or 0.30 percent, to 12,477. Standard & Poor's 500 index futures fell 4.30, or 0.32 percent, to 1,347.10, while Nasdaq 100 index futures fell 4.80, or 0.26 percent, to 1,821.20.

Bond prices rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.50 percent from 3.51 percent late Tuesday. The dollar was mixed against other major currencies, while gold prices rose.

Light, sweet crude rose $1.01 to $102.23 in premarket electronic trading on the New York Mercantile Exchange.

Corporate news appeared to weigh on some investors. Private equity firms leading a $19.5 billion buyout of Clear Channel Communications Inc. were having difficulty reaching terms with the banks committed to financing the deal and the plan was close to collapse, according to a report by The Wall Street Journal.

In other corporate news, Motorola Inc. said it plans to split its troubled handset business from other operations, creating two separate, publicly traded companies.

Electronic parts manufacturer Jabil Circuit Inc. posted a fiscal second-quarter loss and warned its third-quarter results will fall short of Wall Street's expectations.

Overseas, Japan's Nikkei stock average fell 0.30 percent. In morning trading, Britain's FTSE 100 fell 0.48 percent, Germany's DAX index fell 0.41 percent, and France's CAC-40 was off 0.62 percent.

Oil Drops Near $100 on Stronger Dollar

Oil prices fell to hover above $100 a barrel Tuesday as a stronger U.S. dollar made energy futures less attractive to investors.

Many analysts including Tarek El Hewehi believe the dollar's recent depreciation was the primary reason oil surged to a record near $112 a barrel last week, since dollar-denominated oil and other commodities are seen as a hedge against inflation and a falling dollar. Now that the dollar is rising, the effect is reversing.

Light, sweet crude for May delivery fell 59 cents to $100.27 a barrel in Asian electronic trading on the New York Mercantile Exchange by midday in Singapore. The contract fell 98 cents to settle at $100.86 a barrel Monday.

The recent decline in oil prices has been far from decisive, and there are signs that some investors are willing to look beyond the dollar for future price direction. Some investors have sold contracts on concerns that a slowing U.S. economy would dampen crude oil demand. Last week, oil prices dipped in part on worry that Bear Stearns Cos.' near-collapse was a sign of significant economic problems.

Some analysts believe oil's recent declines are temporary -- a correction in a bull market -- and that prices will forge higher again when the Federal Reserve cuts interest rates again, as is widely expected. Lower interest rates tend to weaken the dollar.

"It's quite possible for the conditions that have pushed oil prices higher to be re-established," said David Moore, a commodity strategist with the Commonwealth Bank of Australia in Sydney. "U.S. interest rates are low and they will be cut further. In this situation it's possible we'll see renewed vulnerability of the U.S. dollar at some point."

But there is an opposing school of thought that argues prices have risen far higher than can be justified by the oil market's underlying supply-and-demand fundamentals. These analysts believe prices will fall soon and sharply -- regardless of what happens to the dollar.

"One of the things that may count against oil somewhat is the fact that we're now entering into a sort of lower demand part of the year, and they will see some inventory building occurring," Moore added.

In other Nymex trading, heating oil futures lost 1.41 cents to $2.949 a gallon while gasoline prices dropped 0.5 cent to $2.6362 a gallon. Natural gas futures rose 2.1 cents to $9.35 per 1,000 cubic feet.

In London, Brent crude fell 46 cents to $99.40 a barrel on the ICE Futures exchange.

Hewehi Thinks Oil To Reach $120

Oil futures retreated from a new overnight record above $103 as the dollar gained strength and Turkish forces withdrew from northern Iraq, removing two of the reasons underpinning crude's dramatic 19 percent rise from earlier this month.

But many analysts believe the declines may be temporary, and that oil is poised to rise above $103.76 a barrel. That's the price many believe to be oil's all-time high on an inflation-adjusted basis, set in early 1980 during the Iranian hostage crisis.

Gasoline and diesel prices, meanwhile, continued to soar. Gas prices rose 0.3 cent overnight to a national average of $3.164 a gallon, creeping closer to last May's record of $3.227 a gallon, according to AAA and the Oil Price Information Service. Diesel prices jumped 1.5 cents to a new record national average of $3.642 a gallon.

While most Americans fuel their cars with gasoline, most of the products they buy are transported by trucks, trains and ships that burn diesel. While gas prices are unlikely to rise as high as $4 a gallon, diesel may well pass that psychologically important level this spring, boosting prices of nectarines, computers, clothing and virtually every other consumer product, said Tom Kloza, publisher and chief oil analyst at the Oil Price Information Service in Wall, N.J.

"It's everything that gets shipped," Kloza said of diesel fuel's impact on the economy. "That is the one that is much scarier."

Gas and diesel prices are following crude oil, which spiked to a new record of $103.05 overnight. In midday trading on the New York Mercantile Exchange, light, sweet crude for April delivery fell 44 cents to $102.15 a barrel.

The dollar rose against the euro Friday, reversing one of the factors that has attracted huge flows of investment capital to the oil market. Crude futures offer a hedge against a falling dollar, and oil futures bought and sold in dollars are more attractive to foreign investors when the dollar is falling. That logic tends to reverse itself when the dollar weakens.

Also giving investors reason to sell was Turkey's decision to withdraw its forces from northern Iraq, which they invaded earlier this week in search of Kurdish rebels. Turkish attacks on Kurds in northern Iraq -- and the concern that Kurds would retaliate by cutting off oil supplies -- have helped propel oil to new records in recent months.

Traders also continue to fret over OPEC, which meets next week to consider production levels. The prospect that the Organization of Petroleum Exporting Countries might cut production levels has helped fuel oil's recent rise. But with prices holding above $100, most analysts now expect OPEC to hold production steady.

Despite oil's modest retreat Friday, many analysts believe the investment flows that have pushed prices higher this year are not about to dry up.

"We've just got a huge, huge speculative drive going on here," said Jim Ritterbusch, president of Ritterbusch and Associates, an energy consultancy in Galena, Ill. "The fresh buying brings in new buying."

Many analysts believe the underlying fundamentals of oil supply and demand do not justify such high prices. Some predict speculative investing could push oil prices as high as $120, while others argue prices have formed a bubble, and could crash back to the $70 range.

Other energy futures also fell Friday. In other Nymex trading, March heating oil fell 0.35 cent to $2.8421 a gallon while March gasoline futures fell 1.57 cents to $2.48 a gallon. April natural gas futures fell 8.8 cents to $9.355 per 1,000 cubic feet.

In London, Brent crude futures fell 52 cents to $100.38 a barrel on the ICE Futures exchange

Oil $100

Oil prices held near $100 a barrel Thursday after hitting a record overnight as investors poured more cash into crude and other commodities as a hedge against inflation.

Oil futures on Wednesday pushed briefly past $101 a barrel after the U.S. Federal Reserve lowered its forecast for U.S. economic growth this year, convincing energy investors that the central bank will slash interest rates further.

"Investors are going into commodities for a safe haven, because they think commodities may perform better than equities and also may be hedges against inflation," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.

Lower interest rates can help the economy but tend to weaken the dollar, encouraging investors to shift funds into hard assets like gold or oil as a safeguard against inflation. After oil rallied above $100 a barrel, precious metals such as gold and silver also hit records.

The possible rate cut is also viewed as hopeful of bolstering a flagging U.S. economy, which would assuage fears of weakening crude demand.

"We are expecting the U.S. Federal Reserve will cut interest rates further," said David Moore, a commodity strategist with the Commonwealth Bank of Australia in Sydney. "That will help mitigate against the risks of U.S. recession, and would likely be supportive for the oil price."

The March light, sweet crude oil contract, which expired Wednesday, rose overnight as high as $101.32 a barrel, a new trading record. It settled at a record close of $100.74 a barrel.

On Thursday, light, sweet crude for April delivery added 43 cents to $100.13 a barrel in Asian electronic trading on the New York Mercantile Exchange by midafternoon in Singapore. It was unchanged Wednesday at $99.70 a barrel.

Analysts said the rise this week in oil prices was not based on supply and demand fundamentals and that they expected increasing price volatility.

"We are in the spring season, when worldwide demand is typically lower and inventories are building. Yet we see a strengthening of oil," Shum said. "It's really a divergence."

Prices have surged on geopolitical factors such as the possibility that the Organization of Petroleum Exporting Countries may cut its output at a March 5 meeting.

"What that all means is that investors could move out of oil as quickly as they moved in and so this situation could be unstable and pricing could drop as fast as it has gained," he said.

Weighing on prices Thursday were expectations that the U.S. Department of Energy would report later in the day that U.S. crude inventories rose in the seven days to Feb. 15 for the sixth straight week in a row.

"The general expectation is that you'll see another increase in U.S. crude oil inventories," Moore said. "If there was an increase that would just take a bit of the edge off oil prices."

Crude oil inventories were expected to rise 2.9 million barrels, according to a Dow Jones Newswires survey of analysts' estimates.

Gasoline inventories were seen growing 1 million barrels while stocks of distillates, which include heating oil and diesel fuel, were expected to fall 1.5 million barrels.

Heating oil futures rose 0.33 cent to $2.7579 a gallon while gasoline prices added 0.53 cent to $2.5905 a gallon. Natural gas futures rose 0.5 cent to $8.97 per 1,000 cubic feet.

Brent crude added 36 cents to $98.78 a barrel on the ICE Futures exchange in London.

Associated Press business writer Thomas Hogue contributed to this story from Bangkok, Thailand.