(Updated from 9:55 a.m. EDT)
A wrong number from a mobile-phone outfit is wreaking havoc on the markets this morning.
warned it would fall short of its second-quarter targets, and the bears -- fretting over earnings warnings -- took over Wall Street. Both tech and blue-chip stocks headed down at the open.
Nasdaq Composite Index was lately down about 50 points to 2121; the
Dow Jones Industrial Average was off some 88 points to 10,834; and the broader
S&P 500 index was down some 13 points to about 1241.
"Nokia's warning will definitely affect that entire sector," said Jay Meagrow, vice president of trading at
. Meagrow thinks the market will likely turn its focus on
tonight, but doesn't think the highly anticipated IPO will be positive catalyst enough for this market. "I don't see any positive catalysts. It should be a choppy week that trends to the downside," he said.
Indeed, Nokia was off 19.5% to $23.11 in early trading, and rivals
, off almost 7% to $5.12, and
, down by 6.8% to $55.72, were falling in sympathy.
Over the past two days, stocks have fallen on the back of profit warnings from corporate America, particularly in the tech sector. Investors are worried that the second-half recovery they're betting on is becoming
less likely. Over Friday's and Monday's sessions, the Dow dropped 1.5%, the Nasdaq fell 4.1% and the S&P 500 lost 1.8%.
Some upbeat news took the spotlight early this morning.
was upgraded to outperform from neutral by Morgan Stanley, pushing the PC maker's stock up 1.4% to $25.59 so far this morning. And Kraft raised the price range for its
IPO, which is scheduled for Wednesday, up to $30 to $31 from $27 to $30. Tobacco giant
will let go of a 16% stake in the big foodmaker. At the top end of the new range, the IPO would bring in $9.03 billion for Philip Morris. The funds will be used to pay down debt at the tobacco company, whose stock was lately trading 1.2% higher to $49.11.
But the morning's news was overwhelmingly negative and outweighing the positive. Nokia said it expected second-quarter sales growth below 10% year over year, and that it's examining its outlook for the second half.
And a round of profit warnings hit Wall Street last night. Biotech-equipment maker
said it would
fall short of Wall Street estimates for the second quarter, citing slower-than-expected sales. The company's shares were down 33.7% to $27.17 in early trading. And
, the company behind the
home satellite services, said that it would
miss subscriber growth forecasts for the second quarter and the rest of the year. Hughes, a unit of
, cut revenue forecasts for the full year, though it boosted the low end of its estimated range for full-year earnings before interest, taxes, depreciation and amortization. Shares of Hughes were falling 7.5% to $20.90 in recent trading.
There was also a dour outlook for a trio of tech companies from
Credit Suisse First Boston
this morning, which lowered its estimates on Affymetrix, chip-equipment maker
, and chipmaker
. Anadigics was lately down 5.2% to $18.94; Varian was off 0.4% to $39.10.
Federal Drug Administration
this morning denied approval for
joint prostate-cancer treatment. Amgen was lately off 4.4% to $63.80, while Praecis was diving 35.2% to $14.63.
So far, this quarter's confession season has been mostly negative. During confession season, companies let the market know if they expect to miss financial performance targets. Wall Street is hoping corporate profits will begin to reaccelerate during the fourth quarter of this year, but the outlook for a turnaround is still pretty murky.
The list of bad news bears is long: Computer-server maker
, PC maker
, financial powerhouse
J.P. Morgan Chase
, handheld device maker
, among others.
Varian Semiconductor and
also have warned they would miss second-quarter targets.
have issued optimistic outlooks.
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Treasury prices were strong again this morning. The benchmark 10-year
Treasury note was lately up 5/32 to 97 31/32, while yields had slipped to 5.268%. Prices on the 30-year note were climbing 4/32 to 95 20/32, and yielding 5.680%.
Treasuries climbed Monday amid the weakness in equities and more signs of economic slowing in Japan, which experts believe could hurt the chances for a quick U.S. recovery and lead the
Federal Reserve to continue lowering interest rates.
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Techs, telecoms and banks were weighing on the European indices in morning trading. London's
was showing minor losses, lately down 1.18% to 57931.3. The
in Paris was falling 1.7% and Frankfurt's
was moving 1.59% lower. But
was rising after it announced plans to cooperate with
on the rollout of third-generation mobile technology.
The euro was lately trading at $0.8481. The dollar was trading at 121.69 yen.
Monday's reported weaker-than-expected quarterly GDP data for Japan and weakness on the Nasdaq continued to pressure Asian markets. Tokyo's
closed down 386.38 points, or 2.92%, to 12,840. Hong Kong's
closed down 148.81, or 1.09%, to 13,526.68.
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