It's a mixed bag for the stock market Wednesday. The good news? The Federal Reserve cut interest rates. The bad news? Investors have to sift through sluggish earnings results and a profit warning from Sprint. The Dow is set to open sharply lower.
On Tuesday, the Federal Reserve did as expected and cut interest rates by another half-point. It also signalled that there was no end in sight to its campaign to reinvigorate the slowing U.S. economy.
The aggressive move was the fifth straight interest-rate slashing this year and brought the federal funds rate, a benchmark for short-term rates throughout the economy, to 4 percent, its lowest level in seven years.
But the good news may fade quickly Wednesday as investors digest the latest batch of earnings.
Sprint (NYSE: FON), a long-distance telephone company, warned Wednesday that it anticipates second-quarter profit of 28 cents to 30 cents a share and full-year earnings of $1.13 to $1.18 a share. It was expected to earn 32 cents in the second quarter and $1.29 for the year, according to analysts surveyed by First Call.
Stocks to Watch
The company also raised its earnings outlook for fiscal 2002, citing stronger-than-expected sales in its fiscal first quarter. BEA upped its per-share earnings forecast for the year by 2 cents to a range of 41 cents to 43 cents, William Klein, BEA's chief financial officer, said during a conference call with analysts.
At the Bell
The Dow Jones industrial average may open 76 points lower. The Standard & Poor's 500 index for June futures contracts was off 8.9 points to 1,248 at 7:15 a.m. EDT in 24-hour electronic trading.
Reuters contributed to this report.