For those who missed it last night,

Shiva

(SHVA:Nasdaq), warned that its fourth quarter earnings will fall well below Zack's estimates of 21 cents a share. The stock should open "down a ton" according to one trader.

The question is how the news will affect large-cap, core networking companies like

Cisco

(CSCO:Nasdaq) and

3Com

(COMS:Nasdaq). If those are hit, and in today's skittish market that could easily happen, losses may spill over into the semiconductor sector, despite

Intel's

(INTC:Nasdaq) excitement about its new MMX chips.

On the upside for Nasdaq:

Adobe

(ADBE:Nadaq) and

Biogen

(BGEN:Nasdaq) announcing positive earnings after the close.

With

Microsoft

(MSFT:Nasdaq) announcing support for its operating system and CEO Gil Amelio indicating to CNBC that he expects profitability in the Spring, as well as the typical breathless stuff that comes out of MacWorld, one might expect

Apple

(AAPL:Nasdaq) to do well today. But traders said that all the chatter will not likely supersede Apple's news last weekend that it reported that its earnings for fourth quarter would fall well below estimates. That said, one trader told

The Street

, "I wouldn't touch the stock either way, but if someone put a gun to your head, I guess it's a buy."

Traders continue to be concerned about the market's volatility, and don't expect it to move firmly in one direction or another until Friday morning's release of December unemployment numbers. Inflation anxieties and interest-rate fears continue to percolate.

Another lousy day for Japanese stocks. The Nikkei dropped another 215.81, landing at 18,680.38. Traders expect the Nikkei to continue its free-fall, according to wire reports, amid more concerns about the nation's fragile banking sector.

The Nikkei is the lone loser overseas: the Hang Seng closed up 34.77 at 13,454.93, and the CAC, Dax and FTSE were all trading higher at midday. The yield on the 30 year long bond was down .01 to 6.78 and the S&P 500 futures were trading higher in London.

By Justin Lahart

jlahart@thestreet.com