(Updated from 9:46 a.m. EDT)

Stocks were lower after the market ran smack into another spate of negative earnings preannouncements.

The Dow Jones Industrial Average was lately down about 42 points to 10,606; the Nasdaq Composite Index was down almost 14 points to 2018; and the S&P 500 was off by 1.8 points to 1221.

The markets have been in a choppy range this week as investors digest the latest earnings warnings and await the Federal Open Market Committee meeting on June 26-27, when the Fed is expected to lower interest rates by at least another 25 basis points.

"I think a lot of sellers have been washed out in the last couple of days, as evidenced by yesterday's lack of volume," said head trader Rob Arianco at Lehman Brothers. "I think investors are starting to get into a neglect phase -- neglecting bad news," he added. Arianco said that there could be a short-term rally in the market today. "It seems like things are bottoming."

Yesterday, the Nasdaq edged back above the 2000 level, shrugging off earlier weakness to finish ahead by 38.6 points to 2031.2. The blue-chip Dow closed up by 50.7 points to 10,647.33, though it also had fallen into negative territory four times in yesterday's session. The S&P 500 ended up by 10.6 points to 1223.4.

But some tech stocks were feeling pressure this morning after more earnings warnings. Electronics contract manufacturer Sanmina ( SANM - Get Report) was falling in early trading this morning, off 4.4% to $19.20 after guiding down third-quarter earnings and revenue last night, citing the downturn in the electronics industry.

Another noteworthy earnings warning last night came from Transmeta , which said second-quarter sales would fall 40% to 45% from first-quarter results. In April, the company had forecast that revenue would be little changed or higher. The stock was tumbling 55.2% to $5.65 so far today.

This morning, a profit warning by German chemicals stalwart BASF dunked European chemical stocks and triggered fears that defensive shares are not immune to the global economic slowdown. Europe's largest chemical group said it no longer expects operating income to increase in the second quarter, retracting its earlier forecast. The stock was off 4.1% to $36.91 this morning.

Knight Trading Group ( NITE) was falling after announcing this morning it may cut 6% of U.S. brokerage team, citing "changing market conditions." The company also announced other executive reshuffles. Knight was lately trading down 6.2% to $9.35.

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Bonds/Economy

U.S. Treasuries were flat to higher this morning. On the short end of the market, the two-year note was up 1/32 to 100 17/32, making its yield 3.949%. Yields and prices move in opposite directions. The benchmark 10-year Treasury note was up 12/32 to 98 24/32, yielding 5.163%, while the 30-year bond rose 21/32 to 96 17/32, moving the yield down to 5.616%.

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International

European markets traded lower ahead of the European Central Bank's decision on whether to cut interest rates, due later today. Most experts expect the ECB to keep the benchmark refinancing rate at 4.5%.

The FTSE 100 was down 5.3, or 0.09%, to 5694.3, while the Paris CAC-40 was falling 24.47, or 0.47%, to 5146.2. Frankfurt's Xetra Dax recently lost 3.81 points, or 0.06%, to 5872.23.

The euro was lately trading higher at $0.8565. The greenback was higher to 124.18 yen.

Asian markets closed higher overnight. Tokyo's Nikkei 225 closed in the green for a second day, rising 287.79, or 2.27% to 12962.43 and Hong Kong's Hang Seng finished up 268.74, or 2.08%, to 13187.45.

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