Standstill on Wall Street - With uncertainty high, nobody wants to do anything on Friday.

money.cnn.com February 21, 2003: 8:58 AM EST By Justin Lahart, CNN/Money Staff Writer

NEW YORK (CNN/Money) - Heading into the open on Friday, Wall Street was sitting firmly on its hands and trying to take deep breaths for fear that it might do anything rash.

Stocks were cued to open steady, perhaps shading toward the positive column, on a day when investors were scratching their heads over what to do next. Although the diplomatic ruckus over Iraq hasn't settled down, it appears that little will really be known until March gets under way and U.N. weapons inspectors give their next report.

"There's a lack of desire to do anything," said Miller Tabak equity strategist Pete Boockvar. "It's not going to be until March that we get a really good idea about what kind of time table were looking at with Iraq."

But the light volume Friday could lead to choppy trading -- particularly since February options on stocks and indexes expire, often a recipe for volatility.

Inflation at the consumer level in January was in line with expectations. The Consumer Price Index rose 0.3 percent for the month compared to 0.1 percent in December. The "core," which excludes the volatile food and energy sectors, gained 0.1 percent, in line with the December reading.

Economists surveyed by Briefing.com had expected the CPI to rise 0.3 percent, with the core logging a 0.2 percent gain. But after the Producer Price Index showed a surprisingly strong reading on wholesale prices Thursday, the market was girded for a higher reading.

The implication is that although companies are paying more for goods, so far they haven't been able to pass these costs onto consumers. The end result, unfortunately for them, is that profits may be getting squeezed.

There was fresh news on the war front for investors to mull over. Thursday night on PBS Defense Secretary Donald Rumsfeld said U.S. and U.K. troops in the Persian Gulf are ready to go to war. This was in contrast with the popular perception that a couple more weeks are needed to put needed forces in place. Certainly politically attacking Iraq now doesn't seem expedient. Rumsfeld's remarks may have been more of an attempt to put pressure on the French and German faction than anything else.

Meantime, the impasse between Washington and Turkey over using Turkish territory as a launchpad for attacking Iraq's northern border appears close to being resolved. Friday Turkish Prime Minister Abdullah Gul said that his government had come to a "mutual understanding" with the United States.

Finally, amid confirmation from U.N. weapons inspectors that Iraq has not increased its cooperation, London's The Times reports the U.N. Security Council has tentatively scheduled a meeting for March 7 which could set the way for a compromise. Chief U.N. weapons inspector Hans Blix is putting together a list of 40 questions for Iraq that could serve as an ultimatum, according to The Times.

Elsewhere, Merrill Lynch made changes in its weighting for five tech sectors. The firm upgraded Internet and storage to "overweight" from "equal weight" and communications equipment to "equal weight" from "underweight," but downgraded the services sector to "equal weight" from "overweight" and hardware to "underweight" from "overweight."

Other stocks to watch Friday include Texas Instruments (TXN: Research, Estimates), which rose in after-hours trading Thursday after it said it plans to buy back up to 18 million shares.

And retailer Nordstrom (JWN: Research, Estimates) reported higher fourth-quarter profits but projected earnings for the first quarter and year that would be near the low end of Wall Street forecasts.

Treasury prices were little changed, leaving the 10-year note yield at about 3.85 percent.

In currency markets, the dollar was steady in light trading after getting drubbed by Thursday's spate of bad economic news.

Overseas, most Asian markets fell, hurt by worries the weakened dollar will damage exports. Tokyo's Nikkei and Hong Kong's Hang Seng both down about 1.5 percent.

With traders unsure of where the U.S. market would head, stocks in Europe were straddling the flatline midsession.

Rumsfeld's words of word appeared to be trumping news that Iraq is illegally exporting a glut of oil. Brent crude oil for April delivery jumped 30 cents to $31.86 a barrel in London.

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