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

Housing starts will drive direction today as stocks trend lower ahead of the open. The Fed starts its two-day meeting today, and is largely expected to make no move on rates when it winds up the meeting tomorrow afternoon.

European stocks are weaker after Asian stocks scored some gains, with another good day for Japan's Nikkei.

Economists mostly expect a tiny rebound in housing starts for February when they are reported today. This follows a 14.3% decline to a 10-year low of 1.41 million units in January.

Merger Mania

Real, rumored and "sources" stories about deals continue to dominate the headlines. Dubai Aerospace Enterprise is reportedly close to a deal to buy a group of aviation businesses from Carlyle Group for more than $1.5 billion.

Palm shares are jumping in the pre-market after a report on the blog Unstrung quoted sources saying Nokia was a leading contender to buy it though Palm management prefers a private equity buyer. We will look more into this today.

ABN Amro and Barclays admit they are talking about what would be the biggest European banking deal ever at $80 billion.

Merger news aplenty though is not giving stocks the bounce they got yesterday from billions in new deals. Yesterday's rally drove the Dow up 1%, Nasdaq 0.9% higher and S&P500 up 1.1%.

Our Rick Santelli says there's signs investors are feeling a bit better about the world then they did last week when uncertainties about the mortgage market ruled.

"The markets are definitely getting a breath of confidence back. That doesn't mean you couldn't get an equities correction," Santelli said.

Mortgage Drip

More news from the subprime market today. Subprime lender Accredited Home Lenders , which had been seeking funds, said on it had received a five-year, $200 million loan. Its stock is also on the move higher this morning.

Earnings Central

Oracle and Adobe report earnings after the bell.