(Updated from 9:19 a.m. EST)

Market pros are saying fund managers and international investors want nothing to do with the U.S. market.

Indicators in the options market say there's no bottom in sight. And another tsunami of companies lowered earnings estimates last night and this morning.

You'd expect it to be a bit like a Chicago ice storm out there -- deadly, blinding and merciless.

But the

Nasdaq was lately on the upside, gaining 21 to 2354.

Yesterday, more than 700 stocks hit 52-week lows on the Nasdaq, which broke below 2400 for the first time since the first week of June 1999. It wasn't just a 52-week low -- it was an 81-week low. The

Dow Jones Industrial Average was gaining 34 to 10,352, and the

S&P 500 was moving 2 higher to 1267.

Some are wondering today if the tech-heavy Nasdaq could have an eighth down day in a row. Others think this is no time to try buying on the

dips. "People don't seem to have the confidence to buy anything," said Brian Finnerty, head of trading at

C.E. Unterberg Towbin

.

This morning, final third-quarter

gross domestic product, known as GDP, showed that the market value of goods, services and structures produced in the economy grew more slowly than originally expected. GDP came in at 2.2% vs. the previous estimate of 2.4%. Jobless claims came in higher than expected, which might reduce concern over inflationary pressures from a tight labor market. Jobless claims for the week ended Dec. 16 rose to 354,000 from 320,000 the prior week.

No matter what happens to the major stock market indices today, a few companies are going to have a pretty rough time. This morning, beleaguered copy-maker

Xerox

(XRX) - Get Report

announced that it would miss its fourth-quarter earnings estimates by a "wide margin." The

company, which has seen its stock plunge to $6 a share, also said it had drawn down its $7 billion revolving credit line, a portion of which was used to repay the company's maturing debt. Xerox was off 7.3% to $5.56.

And for

Lucent

(LU)

, life certainly isn't pretty. The battered telecom equipment and networking company this morning said it would have significant losses in its current quarter; it also announced a restructuring plan. This follows the announcement last night from its former parent,

AT&T

(T) - Get Report

, which lowered its own

earnings guidance.

Lucent said it expects a pro forma loss of 25 cents to 30 cents per share in the first fiscal quarter of 2001, which ends Dec. 31. Analysts polled by

First Call//Thompson Financial

expect a loss of only 1 cent. Its fourth quarter of 2000 will also disappoint. Instead of the expected $9.4 billion in revenues and earnings of 18 cents a share for the quarter that ended in September, the company said it had $8.7 billion in revenue and earnings of 10 cents a share. Lucent was off 11.7% to $13.75.

Lucent blamed its troubles on the problems among competitive local phone companies, the slowdown in capital spending among established telecom companies and lower software sales.

Slowing capital spending has been cited by several technology companies as the reason for earnings weakness in the past few months. And it illustrates the interdependency between the different technology industries. The economic slowdown bites into one company and then bites into all as weakness trickles down.

Several big-spending telecom companies have cut their capital spending in recent months, including

Bellsouth

(BLS)

.

WorldCom

(WCOM)

and

Williams

(WCG) - Get Report

, while AT&T has said it expects spending to level off.

In October, Lucent, which was spun off from AT&T, warned that fourth-quarter earnings would fall short of Wall Street expectations, marking its then fourth consecutive shortfall dating back to the first fiscal quarter of this year. After that announcement,

TheStreet.com

took a look at how the one-time darling of Wall Street was

in a tailspin.

AT&T

last night lowered its revenue and earnings guidance for the fourth quarter and chopped its quarterly dividend, saying changes in the anticipated signing of certain large network-management contracts and an industrywide slowdown are hurting its operations. AT&T was off 7.6% to $17.50.

Qwest

(Q)

, however, said it expects fourth-quarter earnings to meet or beat existing estimates. It was gaining 5.6%.

Other warnings also crowded the post-close scene last night. Semiconductor company

Micron Technology

(MU) - Get Report

reported earnings that were 2 cents below its target, coming out with earnings of 58 cents per share. Internet broadcasting enabler

RealNetworks

(RNWK) - Get Report

also

warned it would miss earnings targets, as did

wireless chipmaker

Conexant

(CNXT) - Get Report

.

Investors were punishing the hand-held organizer darlings, despite better-than-expected earnings from two of them last night. Both

Palm

(PALM)

and

Research in Motion

(RIMM)

beat expectations. But

Palm,

Research in Motion and

Handspring

(HAND)

are all lower. Palm was losing 27%, Research in Motion was off 3.7%, while Handspring was falling 13.9%.

Back to top

Bonds/Economy

Treasury prices were edging lower this morning after the Fed earlier this week moved its bias on the economy to easing from tightening -- indicating it might lower interest rates as soon as January. The benchmark 10-year

Treasury note was lately down 2/32 at 105 8/32, yielding 5.055%.

Back to top

International

European markets were lower this morning, but they looked better than they have in recent days.

London's

FTSE

was down 59.80, or 0.97%. Across the channel, Paris'

CAC-40

was falling 55.20, or 0.96%, while Germany's

Xetra Dax

was 85.64 lower, or 1.37%.

The flip-flopping euro was rising again this morning, trading up to $0.9152. It has been gaining slowly in the past few weeks as the U.S. dollar weakens in the face of a slowing domestic economy.

Asian markets were bamboozled -- again -- overnight. Japan's

Nikkei 225

fell 491.22, or 3.53%, to 13,423.31. Yesterday, it closed below the key 14,000 mark for the first time in almost 22 months. Hong Kong stocks fell on weakness in techs and telecoms. The

Hang Seng

closed down 271.40, or 1.82%, to 14,659.32.

The greenback was falling against the yen to 112.33 yen.

Back to top