By Denise Duclaux
NEW YORK, March 19 (Reuters) - Stocks are seen rising on a tense Wall Street at Wednesday's open as word that U.S.-led forces moved into the demilitarized zone between Iraq and Kuwait fed hopes for an imminent and quick war against Iraq.
"It looks like we are going to have a firm open, at least for now," said Bryan Piskorowski, market commentator at Prudential Securities. "It's the unwinding of uncertainty and a potential return to economic growth that is creating a call to action here. Many fear missing a rehash of the 1991 post-war rally."
European stocks jumped and U.S. futures clawed into positive ground after Kuwaiti security sources told Reuters that U.S.-led troops had headed into the demilitarized zone (DMZ) that straddles the Iraq-Kuwait border in preparation for an attack on Iraq that may be just hours away.
The June futures for the Standard & Poor's 500 futures gained 5.70 points to 871.80. Futures for the Nasdaq 100 tacked on 3.50 points to 1,091, while futures for the Dow Jones Industrial average rose 51 points to 8,221.
Tens of thousands of U.S. and British troops are in the desert in northern Kuwait preparing to attack. U.S. President George W. Bush has said his forces will invade if Iraqi President Saddam Hussein does not flee by early Thursday. Hussein has vowed to stay and fight the U.S.-led forces.
A U.S. military spokesman said he could not confirm or deny that troops were inside the DMZ. A British army spokesman said only that soldiers had taken up "forward battle positions".
Stocks have rallied as a U.S.-led war on Iraq appears imminent, lifting the cloud of uncertainty dogging the market for months. Investors are betting the war will prove a quick and decisive victory for the United States. The Dow has surged more than 8 percent since its finish last Wednesday when the blue-chip gauge fell close to multiyear lows.
Market watchers warn this week's sessions may be volatile as investors use each headline to try to determine how the mounting crisis will end. Investors are worried about risks such as Iraq setting its oil wells afire, terror attacks or a U.S. invasion getting bogged down.
WAR NOT THE ONLY WORRY
Concerns remain over the health of the U.S. economy. Consumer sentiment has deteriorated, the labor market is struggling and corporate profit growth is shaky.
"On the corporate front, we are not getting any feathers for the bull's cap today," Piskorowski said.
After Tuesday's closing bell, Oracle Corp. , the world's No. 2 software maker, reported year-on-year quarterly profit growth for the first time since late in 2001, but key software sales fell short. Its shares slumped to $11.65 before the opening bell after closing at $12.25.
Semiconductor manufacturer Microchip Technology Inc. sounded another sour note on Tuesday after the close by lowering its fourth-quarter revenue and earnings guidance, saying sales have slowed because of U.S. preparations for a war with Iraq and tensions with North Korea. Shares closed at $23.74.
Corning Inc. , the No. 1 maker of fiber-optic cable, on Tuesday after the close reiterated that it expects sales at its liquid crystal display (LCD) glass business to grow 20 percent to 40 percent annually through 2006. Shares closed at $6.
HealthSouth Corp. -- a provider of physical therapy, diagnostic imaging and outpatient surgery -- said on Wednesday before the open agents of the Federal Bureau of Investigation served it with a search warrant and were given access to financial records. Shares closed at $3.91.
Stocks finished higher on Tuesday after bouncing around break-even for most of the session, as investors weighed hopes that a U.S.-led attack on Iraq would be quick against signs of a sluggish economy.
The U.S. Federal Reserve held interest rates steady and said it could not "usefully characterize" the economy given the uncertainties that abound.
The broad Standard and Poor's 500 index rose 3.66 points, or 0.42 percent, to 866.45 on Tuesday. The tech-laced Nasdaq Composite Index added 8.28 points, or 0.59 percent, to 1,400.55. The blue-chip Dow Jones industrial average was up 52.31 points, or 0.64 percent, to 8,194.23.