Friday February 23, 9:04 am Eastern Time
Stocks Eye Bleak Open Again on Tech News
By Haitham Haddadin
NEW YORK (Reuters) - Stocks are set for another dismal
showing at the open on Friday amid more corporate confessions
of slowing growth, including warnings from computing giant
Sun Microsystems (NasdaqNM:SUNW - news) and wireless
communications firm Motorola Inc. (NYSE:MOT - news).
``At some point in time we will see a lot of this priced in, but right now I don't see anything supporting this market in the early going,'' said Art Hogan, chief market analysts at Jefferies & Co.
``We'll probably have a soft opening and try to find some direction after that.''
Based on pre-open declines in the Nasdaq 100 index of the technology-laden market's largest stocks, the index is set to open the trading day with a decline of nearly 50 points, or 2.3 percent.
Among the leading equity index futures, the March Nasdaq contract was trading 49.50 points off at 2,002.00 about half an hour from the open, pointing to a decline of about 2 percent at the outset.
The Nasdaq futures fell further after the Motorola news. Motorola, the world's second-biggest wireless handset maker, said early Friday it would not meet its first-quarter sales and earnings estimates -- and may report a loss -- because of a significant slowdown in orders across all of its business lines.
Motorola shares were hit in pre-open activity, falling to $15.75 from $17.29 at Thursday's close, and put pressure on other high-tech marquee names including wireless technology firm Qualcomm Inc (NasdaqNM:QCOM - news), software giant Oracle Corp. (NasdaqNM:ORCL - news) and No. 1 chip maker Intel Corp (NasdaqNM:INTC - news), which were among the most active in pre-open trade.
The tech-heavy market was knocked down to two-year lows on Thursday as investors' worried over a batch of bad earnings or downbeat growth forecasts from the high-technology companies,
including EMC Corp. (NYSE:EMC - news), the No. 1 computer data storage company.
``Much like yesterday, when we had warnings from Brocade (Communications Systems) and EMC, today we have Motorola and Sun Micro,'' Hogan said.
The front month S&P 500 futures contract was off 11 points at 1,246.60 and March Dow futures were down 68 points at 10,499, signaling a lower open in the broader market and blue-chip stocks.
No major economic figures are slated for release on Friday, leaving investors to focus on corporate news.
In overseas markets, European tech stocks moved down to fresh lows and the pain continued for former darling Nokia Corp. (NYSE:NOK - news) of Finland on Friday, as Motorola rocked the
markets. Overnight, Tokyo stocks took an S&P downgrade of Japan in their stride Friday, marching higher on strength in banking issues amid hopes government action to help the ailing financial
sector is close at hand.
Investors also expressed disappointment with news after the closing bell on Thursday from Sun Microsystems. The business hardware maker said third-quarter operating earnings will be below previous forecasts. Sun fell in pre-open trade to $19-1/16 from its close at $20-13/16 on Nasdaq. Sun also said it would start a buyback program of up to $1.5 billion in stock.
Among other companies that reported results, BEA Systems Inc. (NasdaqNM:BEAS - news), the emerging leader in software used to manage Web business, tumbled in the aftermarket though its
earnings surpassed Wall Street's estimates. It tumbled to $35-1/8 after ending Thursday's session at $41-15/16.
High-end retailer Nordstrom Inc. (NYSE:JWN - news) said late Thursday it expects first-quarter and full-year 2001 earnings to fall below analysts' forecasts. Shares of Nordstrom ended off 56 cents at $18.91 before the news.
Online software seller Egghead.com Inc. (NasdaqNM:EGGS - news) reported a quarterly net loss that was narrower than expected. It's shares rose sharply after-hours to $1-1/8 from its close at
13/16.
But Pumatech Inc. (NasdaqNM:PUMA - news), which makes infrastructure software that connects mobile devices to the Internet, slipped after it posted a loss in line with Wall Street's consensus.
VerticalNet (NasdaqNM:VERT - news), which provides industry-specific online Web marketplaces and information to businesses, posted a quarterly loss nearly three times larger than its loss in the same period a year ago. Its shares fell in the aftermarket to $3-1/32, down from their close at $3-17/32.
On Thursday, the tech-heavy Nasdaq Composite Index (.IXIC) ended down 23.98 points, or 1.06 percent, at 2,244.96 after plummeting as low as 2,185.91, a level not seen since Dec. 31, 1998. It was
its lowest close in two years.
The Standard & Poor's 500 Index (.SPX) etched out a low unseen since early March 1999, and finished down 2.45 points, or 0.2 percent, at 1,252.82. The Dow Jones industrial average (.DJI),
finished up 0.23 of a point at 10,526.81, virtually unchanged from Wednesday's close.
-----
