Stocks look set to fall at the open after a surge of profit warnings from technology firms such as Tellabs and Infineon renewed concern corporate profits are not on track to recover from an economic slowdown anytime soon.
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Telecommunications equipment maker Tellabs and German chipmaker Infineon dampened hopes the end for slumping earnings was in sight, a day after tech stocks broke a seven-session losing streak with the help of upbeat earnings from No. 2 software vendor Oracle.
"We're looking for a softer opening," said Bob Basel, a trader for Salomon Smith Barney. "There's a lack of a really good piece of news out there."
Nasdaq 100 futures for September lost 35 points to 1,661, while the Standard & Poor's 500 September futures dropped 7.40 points to 1,216.60. The Dow Jones industrial average futures slipped 45 points to 10,620.
Tellabs said Tuesday after exchanges closed it would slash its second-quarter financial outlook as the slumping U.S. economy causes lower equipment-spending by telephone and Internet service customers.
Tellabs expects earnings per share to be break-even, far less than the 29 cents expected by Wall Street, according to research firm Thomson Financial/First Call.
Tellabs shares closed at $21.20.
Infineon said Wednesday it would have a loss of up to 600 million euros ($512.4 million) and warned it could not rule out a loss for its full fiscal year as the slumping global economy cuts into demand for its products.
Infineon's American Depositary Receipts closed at $29.85 in U.S. trading.
Tech stocks that fell in early trading included Applied Material , which dropped to $46.87 from a close of $48.31 and Cisco Systems Inc., which fell to $16.25 from a close of $16.64.
European markets slid after Infineon's profit warning served as a stark reminder that the global tech slowdown was far from over.
The pan-European FTSE Eurotop 300 was down 0.7 percent to its lowest point since April 9. The DJ Euro Stoxx fell 1 percent, with all but five of its 50 constituents losing ground.
Japan's benchmark Nikkei average snapped a three-session losing streak after recent declines offered investors some bargains. Still, the market's outlook was murky after economic data showed Japan's trade surplus dived in May from a year earlier as a slowing global economy chipped away at Japanese exports.
The Nikkei rose 0.80 percent to 12,674.64, paring a recent 12.9 percent decline.
Honeywell International Inc. fell to $37 from a close of $38.50 after the staff of the European Commission recommended that European Union member countries reject General Electric Co.'s proposed $42.02 billion purchase of the arms contractor, sources familiar with the situation said Wednesday.
Contract manufacturer Jabil Circuit Inc. reported earnings and sales that hit its own and analysts' lowered forecasts. Still, the company, which makes personal- computer, communications equipment and other electronics for brand-name companies, forecast sales and earnings could fall in the fourth quarter from the third. Jabil shares closed at $25.11.
Red Hat Inc. the leading distributor of the Linux operating system — an alternative to Microsoft Corp.'s Windows — posted profit that met Wall Street's estimates but refused to give analysts any guidance for future quarters, citing a new focus targeting large companies as customers instead of individual users.