Updated from 11:47 a.m. EDT

Shares of

Wet Seal

( WTSLA) were among the

Nasdaq's

losers Friday after the company posted a second-quarter loss that was wider than expected, warned that third-quarter results would be weaker than expected and said that it is considering strategic alternatives for its business.

Excluding items, the specialty retailer posted a second-quarter loss of 85 cents a share on sales of $105.6 million. Analysts surveyed by Thomson First Call were expecting a loss of 55 cents a share on sales of $105.7 million. Looking ahead, Wet Seal said that it expects a third-quarter loss of 69 cents a share. Analysts were looking for a loss of 22 cents a share. Wet Seal also announced that it would close one of its Arden B. stores and three Wet Seal stores during the third quarter.

Because of the weak operating results at its Wet Seal division, the company has established a special committee to analyze strategic alternatives to enhance shareholder value. The committee will hire a financial adviser as well. Shares of Wet Seal traded down $1.25, or 59.5%, to 85 cents.

Rouse

(RSE)

rose after

it agreed to be acquired by

General Growth Properties

(GGP)

, a large U.S. shopping mall owner, for $7.2 billion, or $67.50 a share in cash. The price represents a 33% premium over Rouse's closing price on Thursday. General Growth will also assume some $5.4 billion as part of the deal. When the deal between the two real estate companies closes during the fourth quarter, the combined companies will operate more than 300 properties. Shares of Rouse traded up $16.04, or 31.7%, to $66.65. General Growth Properties traded down $1.54, or 4.9%, to $30.

Shares of

Sharper Image

( SHRP) traded actively after the company matched recently reduced second-quarter earnings guidance, but warned that third-quarter and full-year results would fall short of expectations. The retailer of specialty gadgets posted a second-quarter profit of 4 cents a share on sales of $149 million. Analysts were expecting a profit of 4 cents a share on sales of $148.3 million.

Looking ahead, Sharper Image expects to post a third-quarter loss of 8 cents to 11 cents a share. Analysts had expected it to post a profit of 6 cents a share. For the full year, the retailer expects earnings of $1.65 to $1.69 a share, below its previous guidance of $1.83 to $1.87 a share. Analysts were looking for earnings of $1.82 a share. Sharper Image said that softer-than-expected sales during the first half of August prompted the weakened outlook. Despite the earnings cuts, shares traded up 59 cents, or 3.5%, to $17.49.

Ceradyne

( CRDN) rose after it received a three-year contract worth up to $461 million. The body-armor company will provide the U.S. Army with lightweight ceramic body armor. Ceradyne received an initial order for $28 million, which will be shipped during the first two months of 2005. The company believes that it will ship more than $168 million worth of products to the U.S. Army during 2005. Shares of Ceradyne traded up $5.08, or 14.9%, to $39.30.

Shares of

Nordstrom

(JWN) - Get Report

fell after the company posted weaker-than-expected-second-quarter earnings and warned that

full-year earnings results would fall short of expectations. The department store chain earned 75 cents a share during the second quarter on sales of $2 billion. Analysts were expecting earnings of 77 cents a share on sales of $1.95 billion. Looking ahead, the company raised full-year earnings expectations to $2.46 to $2.50 a share, up from its previous guidance of $2.42 to $2.46 a share. However, analysts are expecting earnings of $2.54 a share. Shares of Nordstrom traded down $3.74, or 9.2%, to $36.82.

NYSE

volume leaders included

Lucent

( LU), up 2 cents to $3.10;

Nortel Networks

( NT), up 12 cents to $3.86;

General Electric

(GE) - Get Report

, down 6 cents to $32.65;

Hewlett-Packard

(HPQ) - Get Report

, up 40 cents to $18.11; and

Pfizer

(PFE) - Get Report

, up 26 cents to $31.74.

Nasdaq volume leaders included

Intel

(INTC) - Get Report

, down 39 cents to $21.62;

Cisco

(CSCO) - Get Report

, down 22 cents to $18.88;

Microsoft

(MSFT) - Get Report

, up 8 cents to $27.20;

Ciena

(CIEN) - Get Report

, up 10 cents to $2.07; and

Applied Materials

(AMAT) - Get Report

, up 14 cents to $16.02.