The Nasdaq slumped Thursday after a warning from British telecommunications company Marconi sent the networking and telecommunications sectors into a tailspin. Surprisingly large warnings from EMC and AMD mean the tech-heavy index will likely continue on a downward course.
The June employment report, released just before the markets open, is expected to show that the unemployment rate rose to 4.6 percent from 4.4 percent in May. Payrolls are expected to have fallen by about 40,000, much steeper than the loss of 19,000 jobs in May.
Stocks to watch
EMC has become the latest technology bellwether to warn. The data-storage giant said second-quarter earnings will be less than a third of what analysts have been expecting. EMC said it now expects earnings of 4 cents to 6 cents a share on sales of $2 billion. The company was expected to earn 17 cents on revenue of $2.43 billion, according to First Call.
Slowing international sales were blamed for the shortfall. The company had hoped to earn $12 billion for the year, but has been backing off from that goal in recent months.
AMD will also take a tumble after it lowered guidance for its second quarter. The computer-processor maker said revenue and earnings will miss forecasts, blaming a drop in chip prices.
Earnings are now predicted to be 3 cents to 5 cents a share, a small fraction of the 27 cent average estimate of First Call. Second-quarter sales will be down about 17 percent from first-quarter results of $1.19 billion, the company added. AMD projected that second-quarter sales would decline by as much as 10 percent.
BMC Software also joins the club. The software maker said fiscal first-quarter earnings and revenue will miss expectations because of the slowdown in information-technology spending.
Earnings, excluding one-time items, are expected to be between $15 million to $20 million, or 6 cents to 8 cents per share. That's below the 11 cents to 14 cents the company forecast in April and First Call's prediction for 13 cents a share.
At the bell
The Dow Jones industrial average may open 59 points lower. The Standard & Poor's 500 index for June futures contracts was off 6.8 points to 1,217 at 7:15 a.m. EDT in 24-hour electronic trading.
Reuters contributed to this report.