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CNBC's Domm: Today's Agenda in the Markets

Wednesday, 9 May 2007 | 9:20 AM ET

Stocks are searching for direction at lower levels ahead of the Fed's meeting today. The Fed is not expected to move on rates but its comment will be watched carefully.

Merger news and a few earnings are making headlines this morning, including a story that private equity is circling Alltel. Rio Tinto stock moves higher on speculation it is a target of BHP Billiton, despite the fact Rio Tinto says it has not been approached.

The stock market took a pause yesterday on the road to new highs, with the Dow down 3.90 points after dipping as much as 75 points in an early selloff. That was the first losing day in six sessions, and market breadth was lackluster. The Nasdaq managed to scrape by with a tiny fractional gain, and the S&P was off 1.76 points. Overall, a tired sort of market day.

EARNINGS Toll Brothers said second quarter revenue fell 19% and that the subprime mess is hurting demand. News Corp. profits rose to $871 million or 27 cents per share, in line with expectations on movie and DVD sales and an increase in Fox cable channel affiliate revenue. UBS this morning put a 40% probability on News Corp. succeeding with its bid for Dow Jones .

OIL SLICKENING Oil is trading slightly higher after more violence in Nigeria and the kidnapping of several U.S. Chevron workers. U.S. inventory data will be another focus today. "The market continues to be attuned to the situation in Nigeria. We are losing additional barrels as the result of attacks yesterday and there could be the potential for more. Certainly Nigeria has become a key supplier of crude to the U.S., supplanting Venezuela. That makes the situation that much more critical." said CNBC contributor John Kilduff, senior vice president at Man Financial.

Nymex crude rose 1.3%, to $62.26 yesterday, while gasoline for June delivery rose 1.49 cents per gallon, or 0.7%, to $2.2045.

"This is going to be a critical weekly inventory report, more so than usual because the gasoline rally has been flagging and if we see a significant build of a million barrels or more in inventories and a rebound in refinery utilization rates in the U.S., coupled with another strong round of gasoline, the top could be in for gasoline prices," said Kilduff.

"Similarly, the consumer should be experiencing the worst of it in the next week or two and prices should start heading down after we turn the corner on Memorial Day, and the market assesses the supply to be sufficient," he said. Kilduff had predicted gasoline would get to $4 a gallon and it has in some spots, and the national average hit a new high of $3.07.

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BHP
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FOXA
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TOL
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