MORNING WATCH, August 29

Stocks rebounded from two days of losses Wednesday morning, with investors stepping in to buy shares at cheaper prices. After a two-day 337-point drop, the Dow Jones Industrial Average () was trading up 80 points in early action.

Twenty-nine of the Dow thirty stocks are heading higher. Altria () is leading the way on speculation the company will soon announce that it will spin off its international tobacco unit. MO is up $1.09, or 1.6%, to $70.14 a share.  

Tech stocks are stronger. Apple Computer () is up $4.20 to $131.02 on talk the company will unveil a new version of its iPod next week. Seagate () rose after the company raised revenue guidance for the first quarter. Nokia () is showing early strength after announcing that it will move into the Internet services business with the launch of its Ovi Internet service.

Energy-related names are also seeing early strength as crude oil prices gained 35 cents to $72.08 a barrel. Prices are heading higher ahead of weekly inventory data due out at 10:30 a.m. Eastern time.  

Meanwhile, bonds are steady, with no economic news to guide trading today. The benchmark ten-year Treasury bond (September) is up 2/32^nd and its yield is now 4.52 percent.

Overall, it is another slow news day. Trading has been thin due to the fact that many players are on holiday and, as a result, market moves have been exaggerated. Trading is volatile. That could remain the case this week and heading into the three-day Labor Day weekend.

Frederic Ruffy
Senior Writer & Index Strategist
Optionetics.com ~ Your Options Education Site
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