Before the bell 8-18-06: EBAY, GOOG, MSFT, YHOO

It would be nice if this week could end the way it started, on a positive note, continuing the gains stock markets have been posting daily starting Monday. However, early morning futures indicate a lower start for stocks.

If the Dell earnings disappointment (despite meeting reduced guidelines) and the SEC probe into some of its accounting issues are any indication, then at the very least, tech stocks could be taking a hit today.

Other corporate news:

• A federal judge ruled Thursday that the tobacco industry violated racketeering laws, deceiving the public for years about the health hazards of smoking, yet the companies could not be forced to pay the billions of dollars the government had sought. Tobacco companies shares were up in Frankfurt.
• Time Warner said it would restate results, possibly going back to 2000. Again.
• A jury found that Merck "knowingly misrepresented or failed to disclose" information about Vioxx and ordered the drug maker to pay $51 million to a heart attack victim.
• Gap disappointed investors by lowering its full-year earnings target.

This week's rally also had much to do with weaker oil prices, yet this morning we see a reversal of the past few days' trend as oil prices are up again on Iran nuclear concerns.

At 9:50 this morning, the preliminary August consumer sentiment is due. The market expects a fall to 84 from 84.7. Yesterday, July leading indicators was reported. The market expected a rise of 0.1%, but instead the index fell by 0.1% pointing to a cooling economy that still isn't likely to come to a halt.

Bonds were little changed yesterday, but this morning treasury prices edged up with the yield on the 10-year note easing to 4.85%. It is interesting to note that in these past few days a rare thing happened where both the stock and bond markets rallied. As pointed out here, this is a vote of confidence in the Fed policy to engineer a soft landing. Meaning, investors believe that the rate hikes caused the economy to slow growth enough to contain inflation yet still keep corporate profits strong. Yesterday's decline in weekly jobless claims though, should serve a warning, economists say.

Overseas, Asian markets were mixed while European markets are positive at the moment.

Futures are negative in early morning trade (8:00 a.m.), pointing to a lower start for stocks.

Here's a look at some key Blogging Stocks:

eBay Inc (EBAY) shares are down 27 cents to $27.40 as of 8:11a.m. Levi Strauss & Co.'s main Web site has quietly stopped offering Google Checkout as an online payment feature. A hiccup for Google, which is trying to compete with eBay's PayPal.

Google Inc (GOOG) is down 12 cents in pre-market trading to $385.68 as of 8:12 a.m. China.com, an online game and Internet service provider said yesterday it would form a strategic partnership with Google on search engine technology, branding and advertising.

Microsoft Corp (MSFT) was down 3 cents to $24.67 after the trade yesterday. EMI Group Plc, the world's third-largest music company, said on Thursday it had signed a deal to provide preloaded music videos on Microsoft's soon-to-launch Zune digital media player.

Yahoo Inc (YHOO) is down 1 cent to $28.90 as of 8:13 a.m. AT&T Inc. launched on Thursday a Web-based photo sharing service offered in conjunction with Yahoo.