MARKET PREVIEW: Wall Street digests Cisco''s woes

Cisco's second-quarter shortfall and outlook will be front and center for investors on Wednesday. Europe markets fell while trading in Asia was mixed. Early indicators have the Dow set to open lower.

U.S.

The news from tech bellwether Cisco Systems (Nasdaq: CSCO) was not good. After market close Tuesday, the Internet equipment giant missed analysts' estimates for its second quarter and warned of a slowdown in growth over the next six months due to a sudden slowdown in technology spending.

Cisco officials said that the company told investors to expect flat-to-lower revenue in coming quarters. Full-year revenue growth is now projected to be in the "40 percent range", down from previous guidance of 50 to 60 percent revenue growth.

The Wall Street Journal reported Wednesday that News Corp. (NYSE: NWS) may be on the verge of acquiring DirecTV from General Motors' Hughes Electronics (NYSE: GMH), with a possible deal in the next few weeks.

On the economic front, preliminary numbers on productivity in the fourth quarter, along with the December Consumer Credit report, are set for release. According to a survey of economists by Briefing.com, analysts forecast a 2.5 percent rise in productivity in the fourth quarter. Consensus forecasts predict that consumer-borrowing levels fell to $8.5 billion from $12.9 billion in November.

Expect the following technology stocks to be among Wednesday's most "http:="" www.zdii.com="" industry_list.asp?mode="news&doc_id=ZE507482&pic=Y"" rel="">actively traded issues: Cisco Systems (Nasdaq: CSCO), MicroStrategy (Nasdaq: MSTR) and NetCentives (Nasdaq: NCNT).

The Nasdaq ended Tuesday's session up 21.28 to 2,664.49 while the Dow Jones industrial average slipped 8.43 to 10,957.42.

At the Bell

The Dow Jones industrial average is expected to open down 56 points. The Standard & Poor's 500 futures index slipped 6.9 to 1349.40 at 7:17 a.m. EST in 24-hour electronic trading.

The Inter@ctive Week @Net Index gained 1 to 290.04.

Asia

The major Asian markets were mixed. Hong Kong's Hang Seng and the Nikkei 225 both moved up, rising 136.23 to 16,049.47 and 96.16 to 13,366.01, respectively. Singapore's Straights Times fell 5.12 to 1,942.65.

Europe

European markets traded lower. London's FTSE 100 traded off 74.10 to 6,219.30, the CAC 40 in Paris lost 103.38 to 5,748.97 and the DAX in Frankfurt dropped 86.34 to 6,606.69 at 7:09 a.m. EST.

Reuters contributed to this report.