MARKET PREVIEW: Markets absorb rate cut

Investors try to come to terms with the Federal Reserve's interest rate cut while eyeing other economic data and a few more profit warnings. Asian markets were mixed, Europe was down, and the Dow is set to open slightly lower.

U.S.

Markets slumped Tuesday afternoon as the Federal Reserve announced it would only cut rates by half a percentage point, less than the three-quarters of a point some had been expecting. But investors are already speculating that Fed chairman Alan Greenspan will call for another rate cut.

The Labor Department reports its Consumer Price Index for February, which is expected to have risen 0.2 percent last month, less than the 0.6 percent rise posted in January.

In company news, Jabil Circuit (NYSE: JBL) became the latest company to warn. Despite beating estimates in its second-quarter report late Tuesday, the electronics manufacturing contractor lowered its projections for the current quarter and the next one, and said it will cut jobs.

Expect the following stocks to be on the move Wednesday: 3Com, Jabil Circuit, Micron Technology and Quantum.

Technology stocks tumbled with the rest of the market Tuesday afternoon after the Federal Reserve did not cut interest rates as much as Wall Street hoped for. The technology-heavy Nasdaq composite index dropped 93.74 points to end the session at 1,857.44. The blue chip Dow Jones industrial average slid 238.35 points to 9,720.76. The S&P 500 dropped 28.19 points to 1,142.62.

At the Bell

The Dow Jones industrial average may open 23 points lower. The Standard & Poor's 500 index for June futures contracts was off 2.7 points to 1149 at 7:25 a.m. EST in 24-hour electronic trading.

The Inter@ctive Week @Net Index fell 12 to 178.14.

Asia

Trading in Asia was mixed. The Nikkei 225 rose 912.97 to 1,3103.94 as Japan cheered its own interest rate cut--the Bank of Japan cut rates to zero. Singapore's Strait Times index fell 3.70 to 1,728.00 and Hong Kong's Hang Seng dropped 69.42 to 1,3154.44.

Europe

European markets were down. London's FTSE 100 fell 128.40 to 5,518.40, the CAC 40 in Paris lost 120.18 to 5,018.22 and the Xetra DAX in Frankfurt was off 115.01 to 5,667.15.

Reuters contributed to this report.