Wall Street: Still seeing red

NEW YORK (CNNMoney.com) -- Wall Street looked set to take another beating Wednesday, as investors reacted to disappointing outlooks from Apple and Motorola and remained haunted by recession fears.

At 7:35 a.m. ET, Nasdaq and S&P futures were sharply lower, suggesting steep losses at the start of trading once again.

Apple (APPL) posted record quarterly earnings late Tuesday but issued an outlook for revenue and earnings that both fell far short of forecasts, further raising fears that even hot companies won't be immune to the downturn in the U.S. economy. The stock sank more than 12 percent in after-hours trading.

Motorola (MOT, Fortune 500), the nation's largest cell phone maker, announced a sharp drop in earnings and said it now is looking for a loss of 5 to 7 cents a share in the current quarter, rather than the 10 cents a share profit that had been forecast by earnings tracker Thomson First Call. The already battered shares of Motorola fell another 80 cents, or more than 6 percent, in pre-market trading on the news.

Global stocks have been on a crash course, plunging on worries about a U.S. slowdown. The market rout mostly ended Wednesday as Asian markets, which had closed Tuesday by the time the Fed announced it was slashing interest rates, rebounded. But European markets, which had had a chance to react to the Fed cut on Tuesday, fell sharply in midday trading Wednesday.

An emergency rate cut the Fed made Tuesday has helped ease some of the worries hanging over investors worldwide, but there are still concerns that the Fed's dramatic move won't be enough to stave off an economic downturn in the world's largest economy.

Art Hogan, chief market analyst at Jefferies & Co., said that while the corporate news is not good going into Wednesday, he believes it's recession fears that are the bigger drag on stocks.

"Apple is a big drag, it's been one of the darlings," said Hogan. "But one of the biggest disappointments is we're not getting a synchronized set of rate cuts from the other central banks. That's one of the things we were hoping for."

U.S. markets finished Tuesday's session lower but well off the lows of the day soon after the open, as the Fed's cut offered only a limited lift. With no major economic reports on tap Wednesday, investors are likely to face another volatile session.

In other corporate news, chipmaker Texas Instruments (TXN, Fortune 500) said fourth-quarter profit rose 10 percent on strong sales, as it topped forecasts. Shares gained 4 percent in after-hours trading Tuesday.

Early Wednesday Dow component United Technologies (UTX, Fortune 500) reported better than forecast earnings for the fourth quarter. The diversified manufacturer also reaffirmed its 2008 outlook which put full-year earnings at or below the current First Call forecast.

Earnings also are due before the bell Wednesday from Delta Air Lines (DAL, Fortune 500), the subject of intense merger rumors in recent weeks..

General Motors (GM, Fortune 500) is set to report global sales and give its outlook for this year, as the nation's largest automaker tries to stay ahead of Japanese rival Toyota Motor (TM) in global sales. The two had been close in global sales through the first three quarters of 2007, with GM regaining a lead it had lost to Toyota in the first quarter.

Oil prices fell further below the $90 a barrel mark they breached Tuesday. A barrel of light, sweet crude for February delivery lost $1.02 to $88.19 a barrel in electronic trading. But that's still well above the six-week low of $86.11 they hit earlier in the day Tuesday. The weekly report on U.S. fuel inventories, normally out Wednesday, will be pushed back to Thursday this week due to the federal holiday Monday.