A cut in the earnings forecast by the world’s largest mobile phone maker took the wind out of North American markets’ sails Tuesday in early trading.

At mid-day, all but the TSX Venture Exchange were in negative territory. The S&P/TSX composite index was off 8.54 or 0.1% to 8849.95 with declining issues outpacing advancers. Volume was 104.1 million shares.

In New York, the Dow dropped 41 points or 0.39% to 10517.25, while the S&P 500 composite was off 6.32 or 0.55% to 1144.25. The Nasdaq was down 22 points or 1.06% to 2057.04.

Only the TSXV managed a positive showing – it was up a mere one point or 0.06% to 1879.19 on volume of 30.6 million shares traded.

Much of the damage was inflicted by Nokia Corp., which said early in the day that its earnings would be at the low end of expectations and that its sales by value fell 2% vs a previous forecast of 3%-7% growth because a lack of attractive handsets allowed rivals to encroach on its market share. Nokia’s shares, the most actively traded on the New York Stock Exchange, slumped $3.73 or 18% to $17.42.

In Toronto, seven of the TSX sub-sectors were off, led by information technology, which had fallen 1.24% by noon. Gold sub-index posted the largest gain at 0.81%.

Nokia’s pain rippled through other marquee tech names, such as Texas Instruments Inc. and wireless chip maker RF Micro Devices Inc. both of whose shares fell in morning trading. In Toronto, Nortel Networks Corp. was off 25¢.

After three straight sessions of gains, Wall Street was bracing for quarterly earnings to kick off in earnest. One bright spot was cereal maker Kellogg Co., which rose US95¢ after it gave a bullish first-quarter earnings forecast on Monday.

After some bullish economic news from the U.S. in recent days, there were also some clouds on the horizon. A report from Investor’s Business Daily and TechnoMetrica Market Intelligence showed confidence in the U.S. economy slipped again in April, surprising analysts who had thought a strong March jobs report would lighten the mood among consumers, a survey showed on Tuesday.

The economic optimism index fell to 52.8 in April from 54.5 in March, the third straight drop and a long way from the 22-month peak of 60.6 hit in January. A reading above 50 indicates optimism. The gauge is based on over 900 interviews and predicts with 90% reliability the widely watched University of Michigan and Conference Board consumer sentiment surveys.

There was little economic news in Canada, but what there was was relatively good.
Statistics Canada reported that the overall value of building permits issued by municipalities rose by 1.6% from January to $4.4 billion.

Construction intentions in the housing sector fell in February for the second consecutive month, the agency reported Tuesday. “However, the decline was offset by a strong rebound in proposed non-residential projects.”

On a year-to-date basis, the total value of building permits hit $8.7 billion, up 3.4% from the first two months of 2003.

In news after the markets closed Monday, the U.S. Federal Reserve approved Manulife Financial Corp.’s stock-swap takeover of John Hancock Financial Services to create the second-largest life insurance company in North America.

The Canadian dollar was down slightly, at US76.27¢ from its close Monday of US76.21¢.