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Market Insider/Thursday Look Ahead

Inflation worries are again gnawing at stocks.

The dollar came under selling pressure again Wednesday, and gold and oil raced to new highs as the greenback hit new lows. The resulting concern about inflation promises to be a topic on investors' minds Thursday as they await rate decisions from the Bank of England and the European Central Bank, ahead of the U.S. open.

The ECB though is not expected to make any moves even though there is a growing chorus that would like to see Europe's central bankers to work in tandem with the Fed.

Chain stores report February sales, and those reports will start rolling out ahead of the open. Analysts expect to see the weakest February in four years. Other economic news to watch includes initial weekly jobless claims at 8:30 a.m. and pending home sales, due at 10 a.m.

Wednesday's stock market was rocky, and fitful, first encouraged by the prospect of a deal for bond insurer Ambac, then discouraged. Ambac reported it is able to raise $1.5 billion, but its stock sunk as Wall Street worried it would need more capital to stabilize its credit ratings in the future.

After the bell, Thornburg Mortgage said in a filing it failed to meet a margin call. J.P. Morgan, which had extended the original margin call, notified Thornburg of default. The mortgage company's shares plummeted.

End of an Era?

Poor Bill Gates. The Microsoft founder was pushed from the top of the Forbes richest list by none other than his good friend Warren Buffett, who increased his wealth by $10 billion this past year to $62 billion. Proving the old saying, "It takes money to make money."

Gates, worth $58 billion, didn't just fall to second place. He slipped all the way down to third place, behind Mexico's Carlos Slim, who is worth a fat $60 billion. Forbes says Gates would have been as rich, or richer than Buffett if it were not for the dip in Microsoft stock after it bid for Yahoo .

Speaking of Yahoo. The company changed its bylaws, in the process wiping out the March 14 filing date for proxy challenges. Microsoft was clearly going to use a proxy contest as a way to pressure Yahoo. Yahoo said it will now set the proxy deadline is now 10 days after it announces the date of its annual meeting. Microsoft now has a few options, including taking its offer directly to shareholders. Yahoo shares rose on the day.

Market Mayhem

The Dow finished 41 points higher or 0.3 percent, while the Nasdaq, lifted by tech buying, rose 12.53 points or 0.6 percent. The S&P 500 was up 6.95 points or 0.5 percent. Materials were the best S&P sector, up 2.4 percent on the day. The energy sector jumped 1.8 percent, and telecoms were up 1.3 percent. Technology gained 0.81 percent. The biggest loser was financials, down 0.7 percent.

Oil jumped $5 per barrel or 5 percent to $104.52. Gold jumped $22.30 per troy ounce or 2.3 percent to $986.20, while copper popped 4.2 percent or 16.25 cents per pound.

In Treasurys, the 10-year fell 30/32, lifting its yield to 3.695 percent. The two-year's yield rose to 1.675 percent.

Just A Toe

Standard and Poor's issued a a note Wednesday saying don't jump in with both feet, BUT it looks like a low is near in the stock market. S&P's investment policy committee raised it recommended U.S. equities weighting to 45 percent exposure from its previous 40 percent. It said it believes Tuesday's market action was very likely a successful retest of the late January closing lows.

S&P's analysts said they reduced cash holdings to 15 percent from 20 percent. "While we acknowledge that the equity markets may renew their downward trend, we would likely view that as a buying opportunity, provided our economic and earnings outlooks remain favorable."

S&P said it believes that it will be seen that the market on Tuesday successfully retested the January lows by major indices. It said the key lows from January held, providing a market floor. A very positive sign was the fact that market internals improved during the test. S&P cautioned though that the market still needs to see signs that institutions are moving back into stocks.

"To complete a bullish reversal formation, the S&P 500 would have to take out the recent highs at 1395, as well as the 1407 level, which is where the bulk of chart resistance begins."

Stocks In The News

Apple makes a iphone software announcement Thursday. Motorola could see some action after Carl Icahn announced late Wednesday he raised his stake to 6.3 percent from 5 percent.

Around The World

Venezuela deployed tanks and air and sea forces toward Colombia, raising tensions between the two.

Questions? Comments? marketinsider@cnbc.com

  • Patti Domm

    Patti Domm is CNBC Executive Editor, News, responsible for news coverage of the markets and economy.

  • A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

  • CNBC Personal Finance Correspondent

  • JeeYeon Park is a writer for CNBC.com. Follow her on Twitter: @JeeYeonParkCNBC

  • Rick Santelli joined CNBC Business News as an on-air editor in 1999, reporting live from the floor of the Chicago Board of Trade.

  • Senior Producer at CNBC's Breaking News Desk.