Palm (PALM): The handheld computer maker is expected to report positive earnings Wednesday. Analysts have been expecting the company to earn an estimated 4 cents per share on revenue of more than $500 million. Shares of Palm fell $1.25, or almost 3 percent, to $42.38.
Micron Technology (MU): The maker of memory is expected to report earnings Wednesday. Analysts polled by First Call/Thomson Financial expect the company to earn 66 cents. Shares of Micron fell $2.19, or about 6 percent, to $32.56.
Cisco Systems (CSCO): The maker of computer networking equipment was downgraded to "near-term accumulate" from "near-term buy" by analyst Michael Ching at Merrill Lynch. Ching cited concerns about slowed capital spending by service providers. Shares of Cisco fell $3.44, or about 8 percent, to $38.31.
Foundry Networks (FDRY): The maker of switches and routers for computer networking warned that its fourth-quarter earnings would fall short of forecasts due to slowing sales. The company predicted earnings of 11 cents to 14 cents per share, far less than the 24-cent consensus estimate of analysts polled by First Call. Shares of Foundry fell $15.25, or almost 50 percent, to $15.38.
Jabil Circuit (JBL): The maker of circuit boards reported earnings that fell short of Wall Street's expectations by 2 cents. The company said it earned 24 cents per share, blaming its shortfall on the PC slowdown. The company also warned that its second-quarter operating income will fall 11 percent from the first quarter. Shares of Jabil fell $6.81, or about 24 percent, to $21.
Applied Micro Circuits (AMCC): The maker of chips for optical networks will replace J.P. Morgan in the Standard & Poor's 500 index after the close of trading Dec. 29. Stocks generally receive a boost when added to this index, as portfolio managers who mirror their funds after the S&P will buy the stock. Shares of Applied Micro Circuits rose $1.44, or about 2 percent, to $63.
IBM (IBM): The computer maker was downgraded to "near-term neutral" from "near-term accumulate" by Merrill Lynch analyst Thomas Kraemer. Kraemer cited a slowdown in information technology spending. Shares of IBM fell $3.56, or nearly 4 percent, to $86.56.
Hewlett-Packard (HWP): The seller of computers and computer equipment was downgraded to "near-term neutral" from "near-term accumulate" by Merrill Lynch's Kraemer, who cited a slowdown in IT spending. Shares of HP fell $1.31, or about 4 percent, to $30.
Yahoo (YHOO): The Web site operator was downgraded to "buy" from "strong buy" by CIBC World Markets analyst John Corcoran. Shares of Yahoo fell $1.19, or about 4 percent, to $26.81.