(Updated from 11:14 a.m.)

Wall Street this morning tried to pull optimism out of a hat.

Despite a

nasty outlook on telecom spending from fiber-optics leader

Corning

(GLW) - Get Corning Inc Report

, tech stocks and the broader market surged out of the gate. But the major indices pulled back a half-hour later, and lately all were negative.

The tech-heavy

Nasdaq Composite Index was dallying just above the flatline, while the broad market

S&P 500 and the

Dow were advancing south.

Volume was remarkably thin ahead of a couple of major earnings reports scheduled for tomorrow:

Motorola

(MOT)

and

Yahoo!

(YHOO)

both release earnings tomorrow.

"Why is the market up? There were rumors all yesterday that IBM would preannounce, and it didn't happen," said Matt Johnson, head of trading at

Lehman Brothers

, before the opening bell this morning. "But it really kicks off tomorrow, with Motorola and Yahoo earnings."

Leading losers on the Dow were

IBM

(IBM) - Get International Business Machines (IBM) Report

and

J.P. Morgan Chase

(JPM) - Get JPMorgan Chase & Co. (JPM) Report

.

Investors again today may be fretting over a possible warning from IBM. Like yesterday, IBM was one of the biggest weights on the Dow. It was lately costing the index some 15 negative points.

It's week No. 1 of the second-quarter earnings season, and Wall Street is looking for signs of an earnings turnaround. The stock market tends to anticipate improvements in the economy and corporate earnings. But a recovery scenario keeps getting pushed further and further out. After weeks of earnings confessions, and at the start of second-quarter reporting season, there are still few signs that earnings or the economy have seen the worst of this slowdown. Analysts at

Thompson Financial/First Call

are forecasting an 18% drop in year-over-year earnings, well above the first quarter's 6.3% contraction.

Some investors may be counting on a repeat performance of the past two quarters, when stocks sold off during confession season only to rally back during reporting season. Indeed, just a week ago, some market pros were predicting a summer rally.

Initially rising in early trading, fiber-optic cable maker Corning later turned south -- lately it was off 4% to $14.49. The company announced after the close of trading yesterday that it was

axing 1,000 more jobs, closing three plants and taking about $5.1 billion in charges in a bid to revive its once-thriving photonic technologies business. Even worse, Corning said telecom spending could continue slowing for another 12 to 18 months, suggesting a bottom is nowhere in sight.

A couple of retailers that said they would

miss earnings targets were also lower this morning.

Linen's 'n Things

(LIN) - Get Linde plc (LIN) Report

and youth apparel chain

Gadzooks

TheStreet Recommends

(GADZ)

both forecast weaker-than-expected second-quarter and full-year earnings. Linen's 'n Things was lately down by 11.3% to $23.25, and Gadzooks was off by 1.6% to $12.35.

But French telecom-equipment maker

Alcatel

(ALA)

was lately flat at $16.25 in the face of bad news. Alcatel announced it would cut 2,500 jobs in the U.S., or 16% of its workforce here, and close a plant, after yesterday's market close.

Ciena

(CIEN) - Get Ciena Corporation Report

and

Cisco

(CSCO) - Get Cisco Systems, Inc. Report

were both lately in the red after being up earlier.

WorldCom

(WCOM)

was barely hanging in the green zone.

Today's corporate news wasn't all bad.

SunTrust Banks

(STI) - Get SunTrust Banks, Inc. Report

reported second-quarter earnings this morning of $1.19 per share, 3 cents ahead of analyst estimates, according to Thomson Financial/First Call. Equipment maker

Newport

(NEWP)

said it would meet its second-quarter earnings targets, while

TiVo

(TIVO) - Get TiVo Corp. Report

said it would be affirming its second-quarter and fiscal year 2002 guidance in a release planned for today. Newport also said it would take a third-quarter charge as a result of job cuts affecting about 10% of its workforce. SunTrust was lately off 0.9% to $63.41; Newport was up 6.2% to $25.54; and TiVo was up 32.9% to $6.74.

In other news,

Triton Energy

(OIL) - Get iPath Series B S&P GSCI Crude Oil ETN Report

was jumping 48.8% to $44.49 today on news that

Amerada Hess

(AHC) - Get A.H. Belo Corporation Class A Report

is buying the company for $45 a share.

And

AT&T's

(T) - Get AT&T Inc. Report

board said it would consider

Comcast's

(CMCSK)

bid for its cable unit, but that it wasn't likely to accept the current $41.4 billion offer. Some Wall Street executives think AT&T will get additional offers for the cable unit. It was Comcast's unsolicited bid for the business that propelled AT&T's stock yesterday and helped boost the Dow. AT&T was lately up 7.2% to $20.06; Comcast was down 1.8% to $38.58.

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