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

Stock futures are aiming at higher territory this morning after yesterday's rocky session. Asian markets were lower and Europe is mixed, but a round of merger activity has stock prices perking up on Wall Street. Existing home sales data will be a big focus this morning after yesterday's report of a surprising 16% jump in April new home sales.

As we saw yesterday, there are suddenly a lot of hateful glances being cast at the bond market.

The two-week creep up in bond yields has the 10-year at a four-month high and has had stock traders scowling all week. But yesterday, traders turned that anxiety into an excuse for action and the Dow took a major intraday flip. After rising close to 100 points on bullish home sales, the fear of rising rates turned the market upside down. The Dow went from 13,624, a new high, to close nearly 200 points lower at 13,441.

The Dow's 0.6% or 84-point decline still leaves it up 2.9% for the month. The S&P 500 kissed record territory goodbye, declining 14.77 points, or 1% to 1507, and the Nasdaq took a 1.5% dive.

"As much finger pointing as there is at the bond market, there's many, many other issues that would give rise to this correction," says our Rick Santelli, who watches the bond market from the Chicago pits. The approaching end of the month and the long holiday weekend are equally possible catalysts for yesterday's selling wave.

Bond traders yesterday were blaming President Bush and politics for market turbulence, says Santelli. "There was a lot of talk about rising politics toward protectionism with China and President Bush holding firm on Iraq," he said. "This (stock market) run up has been helped by globalization and talk of protectionism would take part of that positive away."

Our Larry Kudlow also pointed to President Bush's comments and the protectionist noise coming from Congress.

Bush's commentary on China "wasn't unfriendly, but it wasn't friendly."

After a week of meetings with U.S. officials, China's Vice Premier Wu Yi said last night that the yuan is not the cause of the U.S. trade deficit and said China will contiue to reform its exchange rate on its own "initiative, gradually."

MERGER MADNESS There are some deal headlines this morning. Coca-Cola said it would buy vitamin water maker Glaceau for $4.1 billion as a way to grow non-soda profits. See reporter Christina Cheddar-Berk's related story on why beverage companies are also looking to bottled water as a big source of future growth.

In other deal activity, Nasdaq agreed to buy Nordic markets owner OMX for $3.7 billion.

Our Scott Cohn today examines the current buyout boom with an eye on the big LBO boom of the late 80’s. He finds that some of the players are the same and Wall Street may not have learned that much from excesses of the past.

DOW 14,548 All you Mad Money fans know that Jim Cramer's target for the Dow at year end is 14,548, and all this week he has been dissecting the performance and expectations of the 30 Dow components. "It's not over. It's not over. We haven't had the run yet!" he said on Mad Money after yesterday's stock decline.

"Stay long, as we say on Wall Street, because the Dow is headed for 14,548. I know it seems very far away after a decline like today. But that was my cold shot at the beginning of the year and I am sticking with it in spite of some horrible action today, where stocks cascaded down, I am not deterred! I still think we have a thousand odd points up to go."

Happy Memorial Day.