Premarket: The Bear Battle

Shares of Bear Stearns looked set to rally again, gaining 11% to $6.75 a share in premarket action, according to Archipelago, as speculators — and potentially bond holders — are buying the stock. As Matthew Karnitschnig and David Enrich report in today’s Wall Street Journal, “the run-up in Bear Stearns shares has set the stage for a high-stakes game of brinksmanship, with angry investors in one corner and J.P. Morgan Chief Executive James Dimon and the Federal Reserve, which pushed for the deal, in the other.”

Meanwhile, shares of Morgan Stanley were up 4.1% after the company said earnings came in better than anticipated, but still well short of the bounty of previous quarters. The company posted a 42% decline in net income, in part due to an additional $2.3 billion in write-downs.

American Depository shares of Deutsche Telekom shares fell 9.3%, following a similar slide in Germany, after the company said it’s sticking to its earnings guidance for 2008. The shares were tagged on news that sales and earnings at its T-Home unit in Germany would likely slip in 2008.

Cellular phone maker Sony Ericsson lost 13% after the company said that slower growth in its European markets would hit sales in the first quarter. Rival Nokia was down 6.9%.