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MARKET PREVIEW: Rate fears overshadow tech earnings news

Earnings from Dell are likely to get little response from techs Thursday, as investors obsess over next week's Fed meeting. Asian markets fell sharply, Europe was mixed and the Dow is set to open flat.

U.S.

After a better-than-expected report from Cisco Systems (Nasdaq: CSCO) couldn't save it from valuation concerns, and Applied Materials (Nasdaq: AMAT) got hammered in after-hours trading despite a good outlook.

A report from Dell Computer (Nasdaq: DELL), after the market closes, is expected to show the company earned 16 cents a share in its first quarter, according to First Call.

Internet Capital Group (Nasdaq: ICGE) is also slated to report after Thursday's bell.

The Wintel team will also see some attention Thursday; Microsoft (Nasdaq: MSFT) proposed Wednesday to reject a government plan to divide the software giant in two, proposing restrictions on its business practices instead.

Intel (Nasdaq: INTC) said it will have to replace circuit boards due to a defect makes thousands of computers vulnerable to crashes. The problem could parallel the 'Pentium' flaw that cost the company hundreds of millions of dollars in the early 90s.

Economic news due out Thursday includes a report on retail sales, expected to show a rise 0.5 percent in April. The Federal Reserve meeting on interest rates will be next Tuesday, May 16.

Other stocks to watch Thursday include Applied Materials, 24/7 Media, Serena Software, Pegasus Communications and Qlogic.

At Wednesday's close, the tech-heavy Nasdaq Composite Index slid 199.94 to 3,385.07. The S&P 500 retreated 29.06 to 1,383.08. The Dow Jones Industrial Average dropped 168.97 to 10,367.78.

At the Bell

The Dow Jones industrial average may open about 13 points higher. The Standard & Poor's 500 index for June futures contracts was up 1.7 to 1389 at 7:31 a.m. EST in 24-hour electronic trading.

The Inter@ctive Week @Net Index was down 26 to 446.91.

Asia

Trading in Asia was down sharply. The Nikkei 225 fell 4.63 to 16,882, Singapore's Strait Times index tumbled 2.60 percent to 2,003 and Hong Kong's Hang Seng was down 1.92 percent to 14,492.

Europe

European markets were mixed. London's FTSE 100 climbed 1.21 percent to 6,174. The CAC 40 in Paris slipped 0.68 percent to 6,220 and the DAX in Frankfurt was down 0.50 percent to 7,084 at 7:10 a.m. EST.

Reuters contributed to this report.