BMC Software and Computer Associates led a tech plunge at midday Wednesday after releasing warnings for their upcoming quarters. The Nasdaq shed 75.08 to 3,916.85 and the Dow Jones industrial average slipped 22.81 to 10,536.63.
The Inter@ctive Week @Net Index fell 4 to 497.89.
In economic news,the Conference Board reported that leading economic indicators in May slipped 0.1 percent, indicating the economy is cooling, but not as much as expected: Wall Street had expected a 0.2 percent decline.
BMC Software (Nasdaq: BMCS), down 12 15/16 to 22 9/16, said Wednesday it would earn less than half what analysts were predicting for its first quarter due to weakness in its mainframe business.
Computer Associates' (NYSE: CA) dropped 21 7/8 to 29 1/4 after it said first quarter looks bad and the second quarter doesn't look any better. Shares plunged on the news.
Analysts said there was concern about possible changes in IBM Corp.'s (NYSE: IBM) System 390 mainframes, involving possible new architectures or pricing schemes. IBM was another one of Wednesday's big losers, down 5 5/16 to 104 3/16.
Other software issues, such as Oracle (Nasdaq: ORCL), down 4 11/16 to 75 1/2 and Microsoft (Nasdaq: MSFT), down 15/16 to 79 1/16, were also heading south.
In other warnings, Entrust (Nasdaq: ENTU) said Wednesday it sees second quarter earnings to be 2 cents a share, below First Call's current consensus estimate of 8 cents a share. Shares shed 39 1/16 to 38 1/16, or 51 percent.
Comverse (Nasdaq: CMVT), down 4 1/2 to 86 3/4, said Wednesday it will buy Exalink, which specializes in router-based WAP software for about $480 million in stock.
Intel (Nasdaq: INTC) fell 3 47/64 to 133 9/64, along with other semiconductor issues such as AMD (NYSE: AMD), which fell 7 1/8 to 77 1/8 after Salomon Smith Barney downgraded the sector from an “outperform” rating to a “neutral” rating.
Yahoo!(Nasdaq: YHOO) was down 1 23/32 to 126 5/32, Amazon (Nasdaq: AMZN) was up 7/8 to 37 7/8 and AOL (NYSE: AOL) rose 5/16 to 54 9/16.
Among other leading tech issues: Cisco (Nasdaq: CSCO) fell 1 3/16 to 63 7/16, and Sun Microsystems (Nasdaq: SUNW) lost 1 1/2 to 88 15/16.