M A R K E T .. S N A P S H O T -- Futures dive on Nortel warning
By Greg Morcroft, CBS.MarketWatch.com
Last Update: 8:18 AM ET Jun 15, 2001
NEW YORK (CBS.MW) - Stock futures fell sharply Friday morning after telecom equipment giant Nortel became the latest company to warn about earnings.
Nortel also said it would lay off another 10,000 workers.
Before the warning, the market was down, but in a bit of a holding pattern ahead of May inflation data due before the open.
September S&P futures are down 4.70 points or about 0.4 percent.
Nasdaq 100 futures tumbled 27 points to 1,684.
Nortel Networks (NT) (NT) said it was seeing a "very significant" reduction in equipment purchases in the second quarter compared to the first quarter, as service providers curtail new capital expenditures.See full story
It now expects second quarter revenue of $4.5 billion, while analysts polled by First Call/Thomson Financial had been expecting $6.22 billion. The company said it now expects to report a loss from operations of $1.5 billion, or 48 cents a share, which includes a charge of approximately $950 million for increased provisions.
Nortel also provided an update to its cost alignment plan, which includes a reduction in workforce of 10,000 positions, in addition to the cut of 20,000 positions it announced in April.
Nortel also said it would stop paying dividends on its common stock.
Other stocks to watch
JDS Uniphase slashed its forecast for fourth-quarter revenue and said it would suffer a pro forma loss instead of a previously expected profit, citing a decline in spending by telecommunications carriers.
JDS shares plunged as much as 12 percent to a 52-week low in the after-hours session, prompting declines by other fiber-optic related issues, as the warning confirmed speculation that many stocks in the industry are still too high at a time of slowing economic growth and falling sales.
Chipmakers Intel and AMD came under pressure in pre-open trading Friday of U.S. shares after Dutch-based Philip Electronics became the latest European firm to warn on a semiconductor sales slowdown.
Intel Corp. (INTC) was trading at $26.90, down 71 cents from the New York close and Advanced Micro Devices (AMD) was off 14 cents at $27.30.
Global markets
On the benchmark indices, London's FTSE 100 (1805550) was off 0.9 percent, Frankfurt's DAX 30 (1876534) retreated 0.7 percent and the Paris CAC 40 (1804546) slipped 0.9 percent. See London markets report
By comparison, the pan-European FTSE Eurotop 100 (1883619) fell 0.8 percent.
On the new markets and indices, London's FTSE TechMARK (1859502) fell 0.9 percent, Frankfurt's Neuer Markt 50 (1809455) fell 1.2 percent and the Paris Nouveau Marche was down 3.2 percent. See European market data at a glance
-------------------------------------------------------------------------------- |
