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SUNLIGHT, CASHEWS, TEQUILA -- SOME THINGS are very good until too much of them turns them bad.

One of the most chatted-about market drivers of the moment is like that: rising Treasury-bond yields.

The jump in the 10-year Treasury yield to 3.9% Thursday prompted, among other things, a front-page Wall Street Journal article; claims that bonds would soon compete for investor dollars with stocks; and the airing of fears that the world was finally choking on overabundant U.S. government debt.

Huge Treasury supply is a definite, and ongoing, concern. But at least part of the weakened appetite for Treasuries is a matter of the fading of those stubborn fears of a "double-dip" in the economy. Investors ought not to wish for the economic conditions that would cause rates to fall from today's levels, let's remember. In fact, the stock market seems to "want" incrementally higher rates if they come for the favored reasons -- firmer economic activity and waning risk aversion.

And Treasury yields collapsed from the 4% level now just overhead, as the credit crisis intensified in mid-2008, implying that something like "normal" markets should be expected to have yields in this range. Obviously, there is a yield -- and a pace at which it gets there -- where this trend would morph to bad from good. It's hard to know what that is in advance, but it's likely a good bit above 4%.

The concern about bonds "competing" for investor dollars is, at minimum, premature, and perhaps even a non sequitur. Investors have been gorging on bonds for a couple of years with absolute yields near generational lows. They seem not to be so finely tuned to the absolute amount of income bonds offer as to their own fear and greed, and the comfort of buying the thing that has looked most attractive in the rear-view mirror.

THE TONE AND CADENCE OF THE market is probably as hard to predict as its direction. And, indeed, the consensus view coming into 2010 among both bulls and bears that volatility would go higher has been exactly wrong.

Still, there are a few more reasons than usual to think that the coming week could see some jukes and shimmies due to mechanical and calendar influences, as we enter one of those times when the market decides to dance even if most of us can't hear the music.

First come month- and quarter-end, which all else being equal tend to be slightly bullish forces but can generate unanticipated noise. Then there's the fact that in much of the country it's a school-vacation week, with participation thinned by vacationing parent-traders.

And then we have the quirk of Friday's March employment-data release entering a near-trading vacuum. The stock markets in the U.S. and most of Europe will be closed for Good Friday. The U.S. bond market will be open to respond to what is now expected to be the first substantial net increase in jobs since the recession (probably) ended. So, maybe keep at least one eye on the screen this week?

PERHAPS EXPECTEDLY, THE PARENT COMPANY of the New York Stock Exchange is viewed by a great many investors as, mainly, a stock exchange -- and therefore a competitor in a near-commodity business with thin profit spreads not made up for by sluggish volumes.

As it turns out, NYSE Euronext (ticker: NYX) is less than half a pure stock exchange, and is becoming less so each month, as its derivatives exchanges account for a greater share of profits by growing faster and generating higher margins.

Sandler O'Neill analyst Richard Repetto points out that in the second half of 2009, slightly more than 50% of operating income was from derivatives, mostly Liffe futures and U.S.-based options markets.

Greater recognition of this improving profit mix, following clearer disclosure from the company, has helped push NYX shares up nearly 30% since a Feb. 8 low, to 29.15. Yet the Street remains a bit skeptical, with only nine of 25 analysts recommending the stock and the valuation still modest.

Applying a premium futures-exchange price/earnings multiple, based on the relevant peer companies, to NYX's expected 2011 earnings from futures, and a standard cash-equity-exchange value on NYSE earnings, Repetto arrives at a hypothetical sum-of-parts value for the stock above $38. His formal price target is $34, itself representing a respectable 16% return.

E-mail: michael.santoli@barrons.com