Warnings From Canadian Companies Wreak Havoc on North American Markets

📅 June 15, 2001 - Warnings from two major Canadian-based network component manufacturers hit markets hard this morning on both sides of the border.
Nortel Networks (nortel.com) said this morning that it would take charges amounting to a mind-boggling loss of $19.2 billion. The company said it would also slash an additional 10,000 jobs.
CEO John Roth said the losses and job cuts were due to the poor performance of American markets. "Led by the United States, the global telecom industry is undergoing a significant adjustment,'' he said. "After several years of capital expansion exceeding the pace of business performance, the capital markets have significantly reduced the flow of funds to service providers. In response, service providers have made driving return on invested capital their primary focus."
Markets were hit with a double whammy when fiber-optic specialists JDS Uniphase (uniphase.com) cut its fourth-quarter revenue forecast.
The company cut its sales outlook to $600 million, down from its original estimate of $700 million.
The announcements temporarily sent the Nasdaq below the 2,000 level, but the tech-heavy exchange had recovered most of its initial losses by noon.
The Toronto Stock Exchange, however, is still reeling, and is down approximately 130 points in afternoon trading.