Preopen Trading: Sun Continues to Remain Behind the Clouds in Early Action

Despite Sun Microsystems' gloomy forecast, futures were not suggesting much about the stock market's overall opening tone.

Author:: David A. Gaffen
Publish date:: Feb 23, 2001 7:26 AM EST

Despite Sun Microsystems' gloomy forecast, futures were not suggesting much about the stock market's overall opening tone.

Early risers were thrashing Sun Microsystems (SUNW) - Get Report, the Unix server maker and tech bellwether, which said last night it would fall far short of the market's expectations for earnings and revenue for the third quarter. In early action, the stock was down $2.19 to $18.63, a 10.5% loss, on electronic trading network Instinet.

Sun said fiscal third-quarter earnings would be about half what was earlier expected -- 7 cents to 9 cents -- rather than the 15 cents expected by the 18-broker

First Call/Thomson Financial

consensus. The company also expects earnings growth of 10% to 13%, rather than the anticipated 30%, for the quarter, which ends March 31.

Continuing to lose ground this morning was

BEA Systems

, down $6.19 to $35.75, or 15%, after falling sharply in postclose trading yesterday. The applications server company, which provides infrastructure software to e-commerce (not a happy place right now), beat Wall Street's estimates by a penny but are still getting slammed.

EMC

(EMC)

was also lower after trimming in stealth fashion its revenue guidance and saying its 2001 revenue goal was now a "best-case" scenario. The stock, which ended down sharply yesterday, was lately down another $2.35 to $38. Other losers included storage name

Veritas

(VRTS) - Get Report

, down 9.7%, and

Qualcomm

(QCOM) - Get Report

, down 6%.

Of late, the

S&P 500 futures were traded at 1255.10, down 2.4 points, but about a half point below

fair value, indicating little direction at today's open. The

Nasdaq 100

futures were down 22.5 points to 2029, about 10 points below fair value, indicating a slightly negative bias for those stocks at the open. Fair value is a measure of the correct relationship between futures and the cash index and helps determine what direction stocks may be headed at the start of the day's trading.