Futures: Stocks to Open Lower on Earnings

N E W  Y O R K, June 21, 2001 -- Stocks look set to fall at the open after a surge of profit warnings from technology firms such as Tellabs and Infineon renewedconcern corporate profits are not on track to recover from aneconomic slowdown anytime soon.

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Telecommunications equipment maker Tellabs and Germanchipmaker Infineon dampened hopes the end for slumping earningswas in sight, a day after tech stocks broke a seven-sessionlosing streak with the help of upbeat earnings from No. 2software vendor Oracle.

"We're looking for a softer opening," said Bob Basel, a trader for Salomon Smith Barney. "There's a lack of a reallygood 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 7.40points to 1,216.60. The Dow Jones industrial average futuresslipped 45 points to 10,620.

Tellabs said Tuesday after exchanges closed it wouldslash its second-quarter financial outlook as the slumping U.S.economy causes lower equipment-spending by telephone andInternet service customers.

Tellabs expects earnings per share to be break-even, farless than the 29 cents expected by Wall Street, according toresearch firm Thomson Financial/First Call.

Tellabs shares closed at $21.20.

Infineon said Wednesday it would have a loss of up to600 million euros ($512.4 million) and warned it could not ruleout a loss for its full fiscal year as the slumping globaleconomy cuts into demand for its products.

Infineon's American Depositary Receipts closed at $29.85 inU.S. trading.

Tech stocks that fell in early trading included AppliedMaterial , which dropped to $46.87 from a close of$48.31 and Cisco Systems Inc., which fell to $16.25from a close of $16.64.

European markets slid after Infineon's profit warningserved as a stark reminder that the global tech slowdown wasfar from over.

The pan-European FTSE Eurotop 300 was down 0.7percent to its lowest point since April 9. The DJ Euro Stoxxfell 1 percent, with all but five of its 50constituents losing ground.

Japan's benchmark Nikkei average snapped athree-session losing streak after recent declines offeredinvestors some bargains. Still, the market's outlook was murkyafter economic data showed Japan's trade surplus dived in Mayfrom a year earlier as a slowing global economy chipped away atJapanese exports.

The Nikkei rose 0.80 percent to 12,674.64, paring a recent12.9 percent decline.

Honeywell International Inc. fell to $37 from aclose of $38.50 after the staff of the European Commissionrecommended that European Union member countries reject GeneralElectric Co.'s proposed $42.02 billion purchase of thearms contractor, sources familiar with the situation saidWednesday.

Contract manufacturer Jabil Circuit Inc. reportedearnings and sales that hit its own and analysts' loweredforecasts. Still, the company, which makes personal-computer, communications equipment and other electronics forbrand-name companies, forecast sales and earnings could fall inthe fourth quarter from the third. Jabil shares closed at$25.11.

Red Hat Inc. the leading distributor of the Linuxoperating system — an alternative to Microsoft Corp.'s Windows — posted profit that met Wall Street's estimates but refusedto give analysts any guidance for future quarters, citing a newfocus targeting large companies as customers instead ofindividual users.

On Tuesday, Oracle's profit announcement provided a briefreprieve from the recent parade of grim earnings forecasts thathave pummeled Wall Street. It was not enough to wipe awayjitters completely, however, and by late afternoon, the rallyhad lost steam amid persistent worries about America'scorporate profit meltdown.

The Nasdaq composite index initially jumped morethan 3 percent but finished with a gain of just 4.03 points, or0.2 percent, at 1,992.66. The tech-heavy market broke its firstseven-session losing streak since December, 2000, according toMarketHistory.com.

The blue-chip Dow Jones industrial average fell48.71 points, or 0.46 percent, to 10,596.67, pressured by adrop in Honeywell.

The Standard & Poor's 500 Index clung to a slim gainof 4.15 points, or 0.34 percent, at 1,212.58.

The Associated Press and Reuters contributed to this report-->