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Crank call on Wall St.
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March 28, 2001: 7:43 a.m. ET
Warnings from Nortel, Palm erase hopes from consumer report
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NEW YORK (CNNfn) - All the talk of confidence on Wall Street may turn into mere bravado Wednesday as more warnings from key technology companies -- the gloomy notes that have helped fuel this year's market slide -- infect investor psychology.
Nasdaq-100 and Standard & Poor's futures fell sharply early Wednesday, pointing to initial losses for the Nasdaq market, the S&P 500 and the Dow Jones industrial average. If the trend holds, it would at least halt a solid run-up in the indexes this week.
Communication equipment maker Nortel Networks (NT: Research, Estimates) warned late Tuesday that its loss for the first quarter will be greater than expected, and said it will cut another 5,000 jobs. The company's shares dropped $1.76 to $15 in after-hours trading following a 16-cent drop in regular hours.
Palm (PALM: Research, Estimates), the handheld computer maker, warned late Tuesday that it will post a loss for its current quarter rather than the profit previously expected. The company also reported fiscal third-quarter earnings that were slightly above analysts' forecasts. Palm shares were down $5.50 to $10 in before-hours trading Wednesday after a $1.06 gain during Tuesday's regular session.
All three of the major stock indexes are coming off gains Tuesday of more than 2.5 percent. The catalyst was the Conference Board's report showing surprising strength in consumer confidence in March, a sign that an economic downturn may not be long-lasting.
 The Dow Jones industrial average begins at 9,947.54 after its first three-session winning streak since October. The Nasdaq composite opens at 1,972.26 after its second straight advance, while the S&P 500 starts at 1,182.17.
In Asia, both Tokyo and Hong Kong finished Wednesday about 1 percent higher. But weakness in telecom issues sent European markets lower in early trading.
Treasury prices edged up early Wednesday, cutting yields slightly. The 10-year note yield dipped to 4.97 percent from 4.98 percent late Tuesday, while the 30-year bond yield dropped to 5.43 percent from 5.44 percent. The dollar declined against both the yen and euro. Brent oil futures sank 31 cents to $25.58 a barrel in London.
 Shares of Agere Systems, the microelectronics division of Lucent Technologies, are scheduled to begin trading Wednesday after their IPO. The company priced 600 million shares at $6 each, raising $3.6 billion. The shares will trade under the symbol "AGR.A"
Walt Disney (DIS: Research, Estimates) confirmed late Tuesday that it is cutting up to 4,000 jobs, as much as 3 percent of its worldwide work force, in a bid to save up to $400 million a year. Disney shares rose $1.28 Tuesday to $29.20.
General Electric (GE: Research, Estimates) agreed to sell its satellite unit to Luxembourg's Societe Europeene des Satellites for $5 billion in stock and cash. GE shares closed Tuesday at $41.91, up $1.68.
A pilots' strike at Delta Air Lines' Comair commuter flight unit enters its third day Wednesday with no new contract negotiations scheduled and no signs that the Bush administration will intervene in the labor dispute. Delta (DAL: Research, Estimates) shares gained 63 cents Tuesday to finish at $40.33.
Telecom equipment maker ADC Telecommunications said Wednesday it plans to cut an additional 3,000-4,000 jobs and expects to post a second-quarter loss due to a slowdown in customer spending. The Minneapolis-based company has already eliminated about 3,000 jobs in fiscal 2001. ADC (ADCT: Research, Estimates) shares finished up 44 cents at $10.56 Tuesday.
Media conglomerate Viacom is abandoning plans to split off its Blockbuster unit, saying the video-rental chain's business has turned around so well of late that it wants to keep it, according to a published report Wednesday. Viacom (VIA: Research, Estimates) shares rose $2.15 Tuesday to $46.25, while Blockbuster (BBI: Research, Estimates) was 6 cents higher at $13.30. 
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