You'd have to be living in a cave to have missed the widespread din of earnings warnings within the past few months.

This morning, Joseph Kalinowski at

First Call/Thomson Financial

issued a report that says his company has collected 490 total pre-announcements already, which is five times the amount First Call collected this time last year. Of those pre-announcements, 321 are negative for the first quarter compared to only 46 collected at this time a year ago.

Kalinowski's data indicate that the bulk of the warnings -- 32% -- are concentrated in the technology sector, followed by consumer services, with 21%.

In the report, Kalinowski writes: "Most disturbing is the fact that 65.5% of total pre-announcements are negative (this figure has historically been 56.3%), and many of these are large-cap bellwether companies (average market-cap of all negative pre-announcements last year was $4.2 billion, while this quarter, that average is $5.8 billion)."

He went on to say that while the economic situation remains murky, "hope lies in the possibility that corporate management is setting the hurdles low, with achievable goals going forward." He singled out

Nortel Networks

(NT)

as an example of a company that others should follow when revising estimates.

Kalinowski said Nortel's issuance of ultra-reduced expectations is preferable to the "tight-lipped" approach taken by

Gillette

(G) - Get Report

, which will "no longer attempt to forecast short-term targets and risk losing focus of the long-term strategy."

Kalinowski added that indices tracking the broader market are expected to grow at a faster rate than the market-cap weighted indices, "while both mid-caps and small-caps outperform their large-cap counterparts so far this year."

While further reductions in forecasts are anticipated, they are not going to come in at the "same severe pace" as they were in the fourth quarter of last year.

The report said the firm expects continued volatility, particularly for tech-related companies. Recent statistics indicate that there will be increased volatility and a risk of further downward revisions in forecasts in the sector.

"We expect short-term volatility and uncertainty to make it difficult for investors to put money into a market, especially when we know that more bad news is coming. However, we continue to believe that the long-term outlook for the markets remains attractive, as flexible monetary and fiscal policy, as well as the dynamics of the new economy, will help us over this short-term hurdle."