Stocks are facing a down open this morning as earnings warnings keep on coming. The big warning today came from Merrill Lynch & Co., which says second-quarter earnings will fall by about 50% due to weak revenue from stock and bond trading.

Other businesses continue to pull in their horns. Applied Micro Circuits Corp. also issued a warning. Cap Gemini SA, Europe’s biggest computer-services company, is cutting 2,700 jobs and lowering forecasts.

Canadian real estate giant Trizec-Hahn announced it is cutting 15% of its current corporate and U.S. office properties work force in a move to “realign and simplify its management structure to improve its focus on operations and its financial performance”. It will record a second quarter charge ranging from US$38 million to US$40 million, in addition to the US$3.5 million provided in the first quarter, to provide for severance, benefits and other costs.

On the economic front, U.S. durable goods orders rose 2.9% in May. This surprised economists who quickly began calling it an anomaly, rather than evidence of a turnaround in manufacturing in the U.S. Autos orders led the way, but even ex-transportation, orders were up 2.7%.

The latest report on Canada’s international transactions in securities shows that in April foreign investors continued buying bonds. They added a further $4.7 billion in Canadian bonds, bringing bond purchases to $13.6 billion so far in 2001. They also bought Canadian money market paper but sold off Canadian stocks for the first time this year. Meanwhile, Canadians’ demand for international equities continued with the purchase of another $3.9 billion in April.

In Europe, stocks are down about 2% on average. The slide is led by Cap Gemini, and financials such as Deutsche Bank and HSBC. The FTSE is down 104 points to 5558. The CAC 40 has shed 113 points to 5100. The DAX is off 108 points to 5794.

Stocks were mixed overnight in Asia. The Nikkei gained 82 points to 12979. The Hang Seng opened its week with a 212 point slide to 12962.