Markets Give Back in First Hours

Stocks looked to open modestly higher Wednesday after retailer Target Corp.'s earnings report was better than the market expected. Dow Jones industrial average and Standard & Poor's 500 futures rose after the discount retailer met analysts' forecasts for its second quarter earnings but beat expectations for its revenue. Target's report comes a day after Wal-Mart Stores Inc. and Home Depot Inc. helped feed the stock rally with upbeat numbers.

Retailers that are doing well or raising their forecasts have given investors some reassurance about consumer spending, particularly because the second half of the year includes the holiday shopping season. Investors are waiting to see if consumers will pick up their spending and help restore some momentum to the economic recovery.

Wednesday's trading was muted however, and that was to be expected after investors on Tuesday showed their first real enthusiasm for stocks in weeks and sent the Dow up 103 points. There were no big economic reports planned Wednesday.
Dow futures were up 31 at 10,389. Standard & Poor's 500 index futures rose 3.20 to 1,092.30. Nasdaq 100 futures gained 3.50 to 1,843.
BHP Billiton's $38.5 billion takeover offer for fertilizer producer Potash Corp. of Saskatchewan turned hostile Wednesday. Potash had called BHP's offer grossly inadequate. The announcement of the bid and Potash's rejection Tuesday helped feed the rally in stocks. Mergers and acquisitions activity tends to lift the market because it shows investors' confidence in the economy.
Still, it's too early to tell if Tuesday's advance, which came on improving economic and earnings numbers, was the start of a turnaround for the market, or a one-shot deal.
Overseas, Japan's Nikkei 225 index closed up 0.9 percent. In later European trading, London's FT-SE 100 index fell 0.7 percent. Germany's DAX index fell 0.1 percent, while the CAC-40 index in Paris fell 0.2 percent.