On Friday, the benchmark government bond yield fell 3 basis points to 4.37 per cent.Stock gains are likely to be led by National Westminster Bank and other financial companies. UK STOCKS and bonds are likely to gain this week as a batch of economic reports bolster expectations for lower interest rates, though the Bank of England will probably hold rates steady until April. Those reports include figures for economic growth, trade and a survey of industrial trends. The figures "will be gilt-positive", said David Coleman, chief economist at CIBC Wood Gundy.

The fourth-quarter gross domestic product "will be revised down and the CBI will be weaker", he said, referring to the CBI's February industry survey. Analysts expect the Government to revise down its fourth-quarter growth estimate to 0.1 per cent or zero per cent from an initial 0.2 per cent growth estimate. Richard Yamarone, an economist at Argus Research, said growth may be revised up to 6.1 per cent at an annual rate, from 5.6 per cent, the estimated at the end of January.. A report on Friday that the US trade gap narrowed in December shows the US may boost its estimate of fourth-quarter economic growth when it updates the figure next Friday. The prospect of higher interest rates also is weighing on stocks with high price/earnings ratios.

On Tuesday, Federal Reserve Chairman, Alan Greenspan, presents his semi-annual testimony on the economy to the Senate Banking Committee, with a repeat performance before the House panel on Wednesday.Investors will be listening for clues that the central bank is leaning toward raising interest rates amid signs that the economy is growing more quickly than expected. Insurer Transamerica gained 33 per cent after agreeing to sell itself to Aegon NV for $10.8bn (pounds 6.55bn) and casino operator Mirage Resorts jumped 22 per cent on optimism that new casinos in Las Vegas will lure more gamblers.The Nasdaq Composite set a record on 1 February at 2510.09, giving it a 14 per cent gain for the year Since then, the index has slid 9 per cent. Dell's fourth- quarter earnings on Tuesday matched forecasts though its revenue growth of 38 per cent fell short of expectations. The stock slumped 11 per cent for the week to 80.125, after losing 12 per cent the previous Friday in anticipation.Microsoft fell 6.3 per cent, software maker Oracle dropped 4.4 per cent and number one online bookseller Amazon lost 2.5 per cent. The computer-dominated Nasdaq Composite Index lost 1.6 per cent, while the broader Standard & Poor's 500 and the Dow Jones Industrial Average gained about 0.7 per cent.Software and computer makers were among the biggest losers in the S&P 500, while casino and hotel and motel stocks gained the most. "We're searching for a little bit of safety - cheaper growth stocks," said Courtney Smith, of Orbitex Management. The performance of the major market indexes last week reflected the slump in computer stocks.

THE slump in high-flying computer stocks presents a quandary for "growth" investors: where to turn when old reliables like Dell Computer Corporation disappoint. The answer for many investors is to shift money into stocks with fast earnings growth that aren't as richly priced. That will mean gains for drug, retail and financial shares in coming days. Last week, the Bank of Japan cut the rate to a low of 0.15 per cent to help pull the economy out of recession. Last week, the benchmark bond yield fell 32 basis points to 1.760 per cent..

Traders are also bracing for more unpleasant surprises as Japanese companies begin posting interim earnings en masse.Matsushita Electric Industrial, Japan's biggest consumer electronics company, reports third-quarter results on Tuesday, and tiremaking giant Bridgestone meets the press on Friday.Bonds are likely to rise as record-low overnight lending rates will probably encourage investors to seek higher yielding long-term bonds. The Topix banks index has risen 3.5 per cent in the last two weeks, boosted by financial authorities who gave a preliminary nod to their request for Y7,450bn in emergency public funding.Daiwa Securities said last week it wants to sell as much as Y50bn in shares it holds in other companies in the near future. "But the end of the fiscal year gives the upper hand to sellers in this market."The key Nikkei 225 average is likely to move between 13,800 and 14,200, Mr Kito predicted. The benchmark last week rose 0.9 per cent to 14,098.04.Recent gains by bank shares on the back of a government bailout plan have increased the temptation to sell for cash-hungry companies. Ian Bauert, Hamersley's director of sales and marketing, said the settlement "has been reached at a time when Japanese crude steel production is at its lowest level in 27 years and shows signs of further deterioration. The European steel industry has sharply cut back production levels and the outlook remains uncertain". "I think these prices were a bit weaker than the market was anticipating.