Stocks look to be in for a rough open weighed down by another round of earnings warnings.

Drug giant Eli Lilly & Co. is out with an earnings warning this morning. Also, telecom firm McLeodUSA is cutting 15% of its employees and taking a US$2.9 billion third quarter charge.

This comes after Nortel Network’s big announcement yesterday evening of another 20,00 layoffs and yet another massive loss.

The poor results are sending stocks down in Europe this morning. The Nortel story particularly is hitting Alcatel SA, Siemens AG and Nokia Oyj. Alcatel also says it is cutting 3,038 jobs in its optical fiber and undersea network businesses. The FTSE is down 61 points to 4,772. The CAC 40 is off 97 points to 3,947. The DAX has dropped 108 points to 4,196.

Crude oil prices are down again today, off another 3%, after it was reported that U.S. inventories continue to build up, thanks to lower demand as a result of the September 11 attacks.

Overnight in Asia, stocks gave up the good fight and caved into the gloomy earnings news from Nortel and mounting evidence of recession in both Japan and the United States. The Nikkei dropped 212 points to 9,924. The Hang Seng lost just 54 points though to 9,897.

In M&A news, L-3 Communications will make a $230 million offer to acquire all of the fully diluted common shares of Spar Aerospace, at $15.50 cash per share. Crescendo Partners II LP and funds managed by Enterprise Capital Management, which control approximately 30.4% of the shares, have entered into lock-up agreements with L-3. Also, Spar’s financial advisor, BMO Nesbitt Burns, says that the offer price is fair.

In other business news, IMAX Corp. reports that its wholly owned subsidiary Mitey Cinemas Inc. has purchased approximately $48 million of IMAX’s convertible subordinated notes in an effort to begin to deleveraging the company and reducing debt.