Just when investors hoped it was safe to go back into tech waters...

Technology stocks were still seeing the fallout from PC giant


(AAPL) - Get Report

which dropped a profit warning after the market closed yesterday. Boxmakers, semiconductors and Internet stocks were all getting their fair share of pain from the news.

After losing more than 6% in a week's time, the Comp was only too happy to tack on more than 120 points yesterday. With yesterday's news, Apple quickly erased that good feeling.

Apple was reeling 52.2% to $25.50 after it warned its fourth-quarter profits would fall well below analyst estimates because of slower-than-expected sales in September. Apple was by far the most active stock being traded on the


, with 109.65 million shares changing hands by afternoon. It also took first place for being the biggest loser on the Comp, helped along by a series of downgrades from

Bear Stearns




Morgan Stanley Dean Witter


The news put an abrupt end to the optimistic vibe that pervaded the Comp yesterday as many hoped the worst of the profit warnings were behind them. The damage was widespread throughout the sector.

Competitors came under pressure as investors tried to figure out whether the latest round of jitters about slowing sales was Apple-specific or applied to the whole sector.



surrendered 13.7%,


(DELL) - Get Report

was down 8.8% to $30.50 while


(IBM) - Get Report

was sliding 3.6%. The

Philadelphia Stock Exchange Computer Box Maker Index

was sliding 12.3%.

Semiconductor stocks were also under pressure with the

Philadelphia Stock Exchange Semiconductor Index

down 5.5%.

Green was a rare sight and one of the few tech stocks sporting it was



which was lifting 6.3%.

Not surprisingly,

TheStreet.com Internet Sector

index was off 2.7% to 713.97.



was tumbling 4.3%.

11:59 a.m.: Apple's Rot Infects PC Sector; PDA Stocks Gain

Bad news from


(AAPL) - Get Report

has soured the morning for boxmakers and taken a bite out of technology stocks today.

Shortly after the closing bell yesterday, PC manufacturer Apple announced that it expects to miss fourth-quarter estimates. Investors in the after-hours sliced the company's value almost in half, cutting its market cap from $17.4 billion to $8.7 billion. In recent activity, Apple was getting annihilated to the tune of $27, or 50.5%, to $26.50.

The manufacturer of sleek computer models said it expects to earn 30 cents to 33 cents a share, leaving it well behind the 45-cent

First Call/Thomson Financial

consensus. Apple forecast quarterly revenue of $1.85 billion to $1.9 billion, up from $1.83 billion in the third quarter but indicating only modest sequential growth. (


analyzed Apple's

earnings warning in a separate story.)

Investors, who saw the

Nasdaq Composite Index post triple-digit gains yesterday (up 112 points to 3778), had wished to avoid any more preannouncements before the end of the quarter. But their hopes were dashed when Apple confessed.

During a rough preannouncement period, many companies have said high oil prices, a weak euro and slowing demand are eating into third-quarter profits. With these factors still weighing on Wall Street, some observers believe that market was well-positioned for a sell off today.

"Yesterday's market rally was triggered by nothing more than a panic to get long equities before the end of the quarter," says Jim Volk, co-director of institutional trading at

D.A. Davidson

in Portland, Ore.

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On the heels of Apple's announcements, analysts have, predictably, hacked their ratings on the company's stock.

Bear Stearns




Morgan Stanley Dean Witter

downgraded the stock this morning. PaineWebber, however, said the sales weakness was Apple-specific.

In early trading, the boxmakers were falling in sympathy with Apple.


(DELL) - Get Report

was 6.5% lower. Dell said yesterday that it expects a strong fourth quarter to help it reach its 30% revenue-growth goal for the year.

Dow component



was losing 5.5%, while


(IBM) - Get Report

was off 3.2%.



had fallen 14.2% and



was off 2.9%. The

Philadelphia Stock Exchange Computer Box Maker Index

was down 11.6%.

PC makers may not be the only bad apples in the patch today. An article posted yesterday on

CNet News.com

has reported that shipments of


(INTC) - Get Report

long-awaited Pentium 4 processor are going to be delayed.

Citing PC manufacturers, the story says that the Pentium 4 is not expected until the week of Nov. 20 and possibly later. The processor had been expected to arrive around the end of October.


(INTC) - Get Report

, which issued a

profit warning last week, was lately down $2.44, or 5.5%, to $42.

In the Internet area, stocks that managed to gain yesterday after



drubbing have retreated today. Shares of


(EBAY) - Get Report

were lower 1.4%, while



was off 1.3%. priceline itself was down 1.6%.

On the upside, shares of PDA company

Research in Motion


were surging 18.2%. Last night, the company posted a second-quarter loss of 2 cents a share, better than the Street estimate of a 3-cent loss, but down from the year-ago profit of 3 cents a share. The Blackberry maker said the results reflect its increased investment in marketing and channel support costs.

Other PDA stocks were faring well, too, as investors looked for alternatives to the PC sector.



was up 3.2% and



was up 1.6%.