(Updated from 7:25 a.m.)

Thanks a lot,

Nortel

(NT)

. You ruined the whole wide world.

Last night, the networking equipment company

announced that profits would not improve much until the fourth quarter. And Nortel didn't just say this about itself, it said this about the whole American economy, telling investors that the slowdown was "faster and more severe" than it -- or anyone else -- expected. This comes just one day after

Ciena

(CIEN) - Get Report

, a competitor in the networking equipment space, announced that it would see

no significant downturn in sales and profit due to the slowing economy.

The Ciena news kicked off a much-needed rally here in the States. Both the

Dow Jones Industrial Average and

Nasdaq Composite Index posted nice gains Thursday, but that seems rather unlikely to occur today. Judging from futures, overseas trading and additional warnings from tech's biggest names, in this case a pair of warnings from

Hewlett-Packard

(HWP)

and

Novell

(NOVL)

, markets will be dragging.

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S&P 500

futures on

Globex

, an electronic exchange where futures and currency options trade, slid 10.6 to 1330.6. That's really a drop of about 8 from fair value, a number that reflects the correct technical relationship between the S&P 500 index futures and the S&P 500 itself.

Nasdaq 100

futures dropped 56 to 2300. But that's actually a loss of about 81 from fair value, because Thursday's action increased the spread between futures and the Nasdaq 100 index.

Schering-Plough

(SGP)

announced that a probe by the Food and Drug Administration of its manufacturing processes and quality control procedures will result in lower first-quarter and full-year revenue and earnings. Two factories, one in Puerto Rico and one in New Jersey, were found to have "deficiencies concerning compliance with current good manufacturing practices." The news hit Schering-Plough, which was lately off 21.4% in preopen trading, and other pharmaceutical companies.

The Nortel news didn't just sideswipe futures, though. It crushed a would-be rally in Japan and wreaked havoc on Europe.

London's

FTSE

slid 71.2 to 6126.7, as telecommunications companies continued to get creamed in the wake of last week's failed attempt to float shares of telco

Orange

. Between the Nortel warning and recent troubles in

Lucent

(LU)

, telecommunications has faced much adversity lately. Frankfurt's

Xetra Dax

dropped 72.5 to 6519.2. The Parisian

CAC-40

dropped 63.2 to 5641.4.

Over in Asia, markets were disappointed by the Nortel news, which came out after the trading day yesterday. Usually, Japan's

Nikkei

would have rallied, because the Nasdaq Composite rallied. Japanese trading tend to follow what occurs here. But Nortel's warning ruined that rally and the Nikkei fell 151.9 to 13,175.5. Hong Kong's

Hang Seng

slid 126.1 to 15,630.3.

To find out more about international markets, see our

global indices.

For Thursday's postclose trading, see

The Night Watch.