Stocks look set to plunge this morning after the latest massive accounting scandal was revealed at WorldCom Inc. The firm reported that its mistated US$3.9 billion in expenses to create profits.

Stock markets around the world are getting hammered on the news, the U.S. dollar is down as investors lose any remaining confidence in U.S. corporate integrity. Gold and Treasury bonds are up a bit. Dow futures are pointing to more than a 200-point loss on the open, with Nasdaq dropping almost 50 points.

In the meantime, stocks are very weak worldwide. The FTSE is down 139 points to 4,492. The CAC 40 has dropped 163 points to 3,604. The DAX is down by 18 points to 4,023.

Overnight in Asia stocks also took a heavy pounding. The Nikkei lost 422 points to 10,075. The Hang Seng lost 253 points to 10,356.

European telecom giant Alcatel SA also dropped its profit forecast today, citing weak customer spending. A series of credit quality hits is not helping either. Fiat SpA has its credit rating cut to one level above junk by Moody’s Investors Service. And, Moody’s also took Zurich Financial Services AG down two notches.

The only economic news is U.S. durable goods orders for May, which came in up 0.6%. Orders were up the same amount excluding transportation. This sign of recovery won’t do much to weigh against WorldCom on the open today. Also, there should be a Fed decision out later today.

In other news, Mitec Telecom Inc. estimated that its fourth quarter net losses will be between $12 and $13 million compared to losses of $0.5 million in the corresponding period last year. For the year, estimated net losses are expected to be between $19.5 million and $20.5 million, compared to the net loss of $200,000 last year.