NEW YORK (CNNfn) - U.S. stock investors consider Wednesday whether another high-profile earnings warning, this one from telecom equipment maker Lucent Technologies, as well as concern for the growth prospects for Internet portal Yahoo! will continue to keep the markets in an early fall tailspin.
Early indications suggest U.S. stocks will open sharply lower.
 Lucent's warning, its third in the last year, indicated that income in the recently completed fiscal fourth quarter would be below year-earlier levels, rather than the previously expected improvement. It also advised of problems in its first-quarter results. Lucent cited disappointing revenue in its optical systems business, lower-than-expected results from its circuit switching unit, and an increase in its reserves for bad debt for the disappointment.
Shares of Lucent (LU: Research, Estimates), one of the nation's most widely held stocks, fell $7, or 22 percent, to $24.38 in after-hours trading Tuesday, after dropping 94 cents in regular-hours activity.
Web portal Yahoo! more than doubled its third-quarter profit before special items, earning $81.09 million, or 13 cents per diluted share, compared with $38.48 million, or 6 cents per share, a year earlier. That topped the estimate of analysts surveyed by First Call by 1 cent a share. Its revenue also edged past forecasts.
While Yahoo! beat both earnings and revenue forecasts, it was only slightly better than estimates -- a hint to investors who remember when the company used to blow past targets that growth may be slowing.
Also concerning investors was the fact that Yahoo! reported it served 3,450 advertisers and merchants during the quarter, down from 3,675 during the second quarter, and company officials told analysts during a conference call that much of this drop was due to Internet companies that went bankrupt or stopped spending on the Web during the period.
Shares of Yahoo! (YHOO: Research, Estimates) fell $6.44 to $76.25 in after-hours trading Tuesday, after dropping $3.06 to $82.69 in regular-hours activity.
The Nasdaq 100 futures slipped 35 points to 3,125 in early trading. That put the futures 101.53 points below fair value, a benchmark set daily by traders based on future contracts and their underlying stocks, meaning traders expect a sharply lower open for the Nasdaq market.
S&P futures, the most widely watched futures contract, lost 0.3 point to 1,390.70 on the Globex trading system. That left futures 9.07 points below fair value, suggesting a lower open for that index.
The S&P futures are also watched as an indicator of the Dow Jones industrial average, with one point of difference between the futures index and fair value equal to about eight points on the blue chip measure. So the S&P futures suggested the Dow would open down about 73 points.
 On Tuesday, U.S. stocks finished broadly lower. The Nasdaq composite index fell for the fourth straight day, dropping 115.02 points, or 3.4 percent, to 3,240.54. The tech-heavy index has lost 8.9 percent in the recent slide and is off 20 percent for the year, and it would hit its low for the year with another 76-point decline Wednesday.
The Dow Jones industrial average tumbled 44.03 points to 10,524.40, while the S&P 500 index, a broader measure of large cap stocks, sank 16.09 points, or 1.2 percent, to 1,385.94.
In Asia Wednesday, major markets were lower on declines of tech and telecom stocks. The telecom and tech selling continued in morning trading in Europe, leaving major markets lower.
In the Treasury market, the 30-year bond was little changed in price in early trading, putting its yield at 5.82 percent. The 10-year note, which some observers now consider their Treasury benchmark, gained 3/32 of a point, which lowered its yield to 5.78 percent from 5.80 percent.
In the currency market, the dollar strengthened slightly versus the euro and yen in early trading. The euro slipped to 87.20 cents from 87.23 cents in late trading Tuesday. The dollar rose to 108 yen from 107.74 yen.
Oil prices climbed in London trading Wednesday, after a report Tuesday evening indicated another decline in U.S. fuel stockpiles. The price for Brent crude for December delivery rose 68 cents to $32.81 a barrel.
Click here for Tuesday's after-hours news.
Click here for Tuesday's after-hours trading.
Click here for Tuesday's earnings news.
Click here for A.M. Market Call page.
Click here for after-hours trading quotes
Click here for current world markets
In other company news, The European Commission approved the proposed purchase of Time Warner (TWX: Research, Estimates) by America Online (AOL: Research, Estimates).
Shares of AOL gained 14 cents Tuesday to $57.24, while shares of CNNfn parent Time Warner rose 60 cents to $85.10.
Biogen reported better-than-expected results Tuesday evening. The biotechnology firm reported results 1 cent a share better than First Call's forecast, earning $68.4 million, or 44 cents per diluted share, up from $62.0 million, or 39 cents per share, a year earlier.
Shares of Biogen (BGEN: Research, Estimates) were one of the better performers in after-hours trading, gaining $1.25 to $52.75 following a decline of $2.31 in regular-hours activity.
Wireless equipment maker Motorola met its earnings expectations in a report late Tuesday, although its revenue missed some forecasts. The company earned $598 million, or 26 cents per share, meeting First Call's estimate and topping the 16 cents it reported a year earlier.
Shares of Motorola (MOT: Research, Estimates) fell 38 cents to $25.88 in after-hours activity after a loss of 75 cents in regular-hours trading Tuesday.
Among companies expected to report results Wednesday are chip maker Advanced Micro Devices and Hughes Electronics, General Motors' closely watched satellite communications unit.
First Call forecasts AMD (AMD: Research, Estimates) earned 62 cents a share in the third quarter after a 36 cents a share loss a year earlier.
First Call does not have any EPS estimates for Hughes (GMH: Research, Estimates), which has a tracking stock that follows its performance. But Zacks forecasts it lost 7 cents a share in the third quarter after a 4-cents-a-share loss a year earlier.
Shares of AMD gained 38 cents to $22.75 in trading Tuesday, while Hughes shares lost $2.25 to $29.
The Wall Street Journal reported that Leo Hindery is expected to step down Wednesday as chief executive of Global Crossing (GBLX: Research, Estimates) after just seven months in the top post at fiber-optic network provider.
Shares of Global Crossing lost $2.13 to $23.88 in trading Tuesday.
A report on wholesale inventories in August is the only major economic report due Wednesday. A survey of analysts by Briefing.com forecasts that inventories grew by 0.5 percent in August after a 0.3 percent rise in July. 
|
