Gapping Down
Slower-than-expected revenues at Nortel
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PowerRating) have stocks sinking sharply
at the open Wednesday ahead of the existing home sales report due out later this
morning.
The Nasdaq futures are down 80 points, and the Dow futures are down 63
points.
The S&Ps look to open down 11.50 points while the yield on the 10-year
Treasury is 5.60%.
Street estimates look for an existing home sales figure of 5.09 million
units. The report is set to be released at 10:00 AM ET.
Morning Movers
Nortel Networks
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PowerRating) earned 18 cents per share for the third quarter, and
although that beat First Call/Thomson Financial estimates of 17 cents per share,
Nortel plunged after hours Tuesday because revenues were slightly lower than
analysts expected. After closing at 63 5/16, Nortel fell to 48 5/8 on Instinet.
Nortel’s weakness has spread to some of the other optical/tech leaders, as
PMC Sierra
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PowerRating) and JDS Uniphase
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PowerRating) are set for large gap-down openings. PMC Sierra
closed at 198 7/8 and is trading down to 173, while JDS Uniphase is trading down
to 79 1/4 following its 95 1/16 close.
Amazon
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PowerRating) posted a narrower-than-expected loss of 25 cents, which
beat Street estimates of a 33 cent per share loss, and that has Amazon opening
higher Wednesday. After closing Tuesday at 29 9/16, Amazon is trading up to 32
1/4 in pre-market activity.
Cisco
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PowerRating) is another tech bellwether under pressure as a result of
the Nortel selloff. Cisco closed Tuesday at 54 7/8 and is trading down to 50 in
pre-market activity.
Splitsville
News that AT&T
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PowerRating) will split into four different companies in 2002 has
the stock trading slightly higher. AT&T closed Tuesday down 3/4 to 26 7/8
and traded up to 27 1/4 on Instinet.