NEW YORK (CBS.MW) -- The broader market is set for some steady action while techs are girding for a soft start to Wednesday's trading session as investors digest a profit warning in the storage sector.
March S&P 500 futures gave up 2.50 points, or 0.2 percent, and were trading a mere 0.40 point above fair value, according to HL Camp & Co. Nasdaq futures shed 12.00 points, or 0.8 percent and were trading 7.30 points under fair value.
McData tumbled 20 percent in dealings before the official opening bell. Late Tuesday, the company warned that it would not meet Wall Street's financial targets for the first quarter, citing cautious spending on technology products by larger customers.
McData closed down a bruising 12 percent Tuesday after the company announced a lawsuit of competitor Brocade Communications for patent infringement. Brocade (NasdaqNM: BRCD - news) lost $1.97 to $24.34 in the pre-open.
Storage titan EMC (NYSE: EMC - news) , meanwhile, shed 50 cents to $11.05 in the pre-open after J.P. Morgan cut first-quarter earnings and revenue estimates for the company. J.P. Morgan also lowered its targets on McData (NasdaqNM: MCDT - news) and Inrange Technologies (NasdaqNM: INRG - news) , indicating that McData's negative pre-announcement highlights that high-end storage spending has been difficult to forecast for the first quarter.
Two hardware companies in the spotlight traded mixed in early action.
Dow company Hewlett-Packard (NYSE: HWP - news) lost 59 cents to $20 in the pre-open while Compaq Computer (NYSE: CPQ - news) edged up 12 cents to $11.10. Late Tuesday, advisory firm Institutional Shareholder Services recommended that its clients vote for the proposed $22 billion merger of H-P and Compaq on belief management's upside scenario is achievable
Treasurys softer
Performance in the government bond market remained sub par, with short- and intermediate-term issues stretching their losing streak to five straight days.
Mounting expectations that upcoming economic data will signal a sturdy rebound later in the year have caused inflation-obsessed bond market players to steer clear of fixed-income securities.
The 10-year Treasury note was off 2/32 to yield 5.015 percent while the 30-year government bond erased 3/32 to yield 5.50 percent.
Wednesday's economic agenda includes the release of January factory orders and the Fed's Beige Book report on economic conditions.
In the currency segment, the dollar dropped 0.2 percent to 131.92 yen while the euro gave back 0.1 percent to 87.06 cents.
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