Updated from 4:03 p.m. EDT

Computer Associates

(CA) - Get Report

was getting slammed and was bringing down other software companies with it after it warned investors that its first-quarter earnings would fall short of the 20-analyst estimate of 55 cents a share, citing soft European sales and slowing of its mainframe business. The stock plummeted 21 5/8, or 42.3%, to 29 1/2.

In a conference call, the company's president, Sanjay Kumar, said the decline was in part due to customers who have been holding off on purchases of new software that manage

IBM's

(IBM) - Get Report

mainframes. IBM is expected to change the pricing structure of its OS/390 mainframe and possibly its design. IBM was down 5 1/2, or 5%, to 104.

Credit Suisse First Boston

lowered Computer Associates to buy from strong buy, while

Bank of America

cut its rating on the company to a market performer from a buy.

Morgan Stanley Dean Witter

downgraded it to outperform from buy.

BMC Software

(BMCS)

was also hit with earnings woes, after it cautioned that it would post first-quarter earnings between 18 cents and 21 cents a share, greatly below the 22-analyst estimate of a 46-cent profit. It was down nearly 40%, or 14 3/16 to 21 5/16.

Wasserstein Perella

sliced BMC's rating to hold from buy.

Deutsche Banc Alex. Brown

knocked it down to market perform from buy.

Finally, software developer

Entrust

(ENTU)

tanked, down 52.5%, or 40 1/2 to 36 5/8, after it warned investors that it would post second-quarter earnings of about 2 cents a share, missing the 11-analyst estimate of an 8-cent profit. Its announcement also hurt foreign counterparts

Baltimore Technologies

(BALT)

, down 1 7/8, or 11.4%, to 14 5/8, and

Sonera

(SNRA)

, down 2 1/8, or 4.5%, to 45.

Donaldson Lufkin & Jenrette

lowered Entrust's rating to market perform from buy,

Goldman Sachs

cut it to market outperform from recommended list, while

Sands Brothers

downgraded it to neutral from strong buy.

TheStreet.com/NYTimes.com joint newsroom wrote about

earnings warnings earlier today.

Mergers, acquisitions and joint ventures

GTCR Golder Rauner

, a Chicago-based private equity firm, will acquire the automated teller machine businesses of

Affiliated Computer Services

(ACS)

, a technology solutions provider, for $180 million. Affiliated was barely lower, off 1/16 to 34 1/4.

ATI Technologies

(ATYT)

was unchanged at the end of the trading day after it said that it would supply its RAGE Mobility graphics chip to

Compaq's

(CPQ)

Internet notebook PC, the Compaq Presario 1700.

Credit Suisse First Boston

upped its rating to buy from hold. Compaq was down 3/16 to 25.

Pharmaceutical supplier

Bergen Brunswick

(BBC) - Get Report

got a boost up 1 1/2, or 25.8%, to 7 5/16, after it said it will sell the specialty pharmacy assets of its

Stadtlander

unit to

ProCare Pharmacy

, a unit of

CVS

(CVS) - Get Report

. CVS was 5/16 higher to 39 11/16.

As part of the agreement, Bergen will provide $2.5 billion in pharmaceuticals to CVS ProCare during the next five years, making Bergen the primary supplier of branded and generic pharmaceuticals to ProCare.

TheStreet.com/NYTimes.com

joint newsroom wrote about the

deal in an earlier story.

Conseco

(CNC) - Get Report

, down 1 3/16, or 10.4%, to 10 3/16, sold most of its $400 million credit card portfolio to the

Wells Fargo Financial Bank

unit of

Wells Fargo

(WFC) - Get Report

, up 3/4 to 41 7/16.

Comverse Technology

(CMVT)

, a manufacturer of software for wireless-communications systems, announced that it will purchase privately held Israeli start-up

Exalink

for roughly $480 million in stock. Comverse dropped 8 1/8, or 8.9%, to 83 1/8.

British advertising company

Cordiant Communications

(CDA)

said it will buy

Lighthouse Global Network

in an all-share deal worth about $592 million. Cordiant was down 2, or 7.1%.

The

European Union Commission

gave antitrust clearance to U.S. energy company

Enron's

(ENE)

bid for

MG Technologies'

MG unit, which is the world's leading metals trader. In a statement, the commission said that it cleared the acquisition "after it concluded that the deal wouldn't create a dominant position since the companies are currently active in different markets." Despite the good news, the stock was off 1 9/16 to 66 7/16.

Glaxo Wellcome

(GLX)

, down 1 27/32 to 59 3/32, and

SmithKine Beecham

(SBH) - Get Report

, down 1 13/16, or 2.65% to 66 1/2, said they expect to see their merger completed Aug. 21. The companies, which when combined would create the world's largest pharmaceuticals company by sales, announced their merger plans in January.

Glenayre

(GEMS)

acquired 6.5%, or 4.6% on a fully diluted basis, of

Multi-Link Telecommunications

(MLNK)

shares outstanding for about $2.7 million. Glenayre finished the day 7/16 lower to 10 3/16. Multi-Link was off 1/8 to 10 1/8.

Terms of the deal call for Multi-Link, which uses the Glenayre voice-messaging platform, to buy at least $2.5 million in equipment over three years. Glenayre will have visitation rights at board meetings and will advise Multi-Link on the expansion of its Internet-based, wireless messaging services. A spokesman for Glenayre said it hadn't owned any shares prior to the purchase, and didn't have immediate plans to buy more.

Hewlett-Packard

(HWP)

announced a strategic alliance to integrate, market and sell

Novadigm's

(NVDM)

software and content management products with HP OpenView management solutions for the enterprise and service providers markets. Hewlett-Packard lost 4 5/8, dropping to 119 5/8. Novadigm gained 2, or 9.4%, pushing it up to 23 3/8.

Leap Wireless'

(LWIN)

Cricket unit will buy about $900 million in

Lucent's

(LU)

wireless infrastructure equipment and in Lucent's Net Care deployment services.

The new pact almost triples the companies' earlier deal covering $330 million in equipment and services. Leap said the new deal also expands the financing available to Cricket for these purchases and for additional related network costs. Leap was up 1 11/16 to 46 15/16, while Lucent was down 2 9/16 to 56 5/8.

724 Solutions

(SVNX)

, which has technology that allows customers to use cellular phones, palm-top computers and pagers to access account information and statements, transaction details, intra-bank transfers and bill payments, is talking with Mexico's largest financial group to offer wireless financial services in English and Spanish.

Financial terms or value weren't disclosed. Grupo Financiero Bancomer shareholders last week voted in favor of a $2.5 billion takeover by Banco Bilbao Vizcaya Argentaria that would create the largest bank in Mexico, with more than 9 million customers and leading in deposits in Latin America. 724 was 1 1/4 lower to 44 15/16 on the news.

Sprint

(FON)

, which ended the day down 15/16 to 53 1/2, is expected to announce this week it will call off its plan to merge with

WorldCom

(WCOM)

, reports

The Wall Street Journal

. WorldCom inched up 3/8 to 45 1/2.

The article said an end to the deal could pave the way for an offer from

Deutsche Telekom

(DT) - Get Report

, which was down 1 13/16 to 54. It also cited people familiar with the situation as saying the offer could be worth more than $110 billion. The

Journal

said Deutsche Telekom hasn't decided to make an offer for Sprint yet because it won't match the $76 a share that WorldCom was offering and it's still considering a takeover bid for

Qwest Communications

(Q)

. Deutsche Telekom may have some competition in

BellSouth

(BLS)

, which was also reported to be looking to make an offer for Sprint. Qwest got a lift up 5, or 11.6%, to 57 3/4. BellSouth slid down 1/16 to 43 1/2.

Reuters

reported that Canadian company

Winspear Diamonds

is fighting off a $175 million hostile bid by

De Beers

(DBRSY)

, which is the world's biggest diamond firm. Winspear said it had opened its files to third parties in an effort to attract a white knight. It also said De Beers' offer "significantly undervalues" Winspear. De Beers tiptoed up 1/4 to 24 11/16.

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Earnings, revenue reports and previews

Centura Banks

(CBC)

cautioned investors that it would post second-quarter earnings between 71 cents to 74 cents a share, missing the eight-analyst estimate of 99 cents a share. The bank blamed rising interest rates and margin pressures for the shortfall. Centura said it expects fiscal 2000 earnings to be between $3.37 to $3.47 a share, also shy of the nine-analyst estimate of $4.05 a share. The stock was 3 7/16, or 9.6%, lower to 32 1/2.

Datastream Systems

(DSTM)

fell nearly 24%, or 2 3/4, to 8 3/4, after it warned investors that it would report a second-quarter loss of between 25 cents to 30 cents a share, greatly missing the four-analyst estimate of a 9-cent loss. The software maker said the wider-than-expected loss is due to weakness in its asset-maintenance business.

Delta Air Lines

(DAL) - Get Report

said it will report a $228 million pretax gain for its fourth quarter related to the conversion of 6 million

priceline.com

(PCLN)

common shares into convertible preferred shares of the online ticket discounter.

Delta said it also will record a $34 million downward accounting adjustment in fiscal 2000 after it changed its method of accounting for the sale of frequent flyer mileage credits to participating partners, such as credit card companies. Under the company's new accounting method, a portion of the revenue from the sale of mileage credits will be deferred and recognized when the credits are redeemed for travel. Also, Delta will recognize a one-time, pretax charge of $86 million for the quarter as a result of its early retirement medical option plan. Delta finished the day up 2 to 53 3/8, while priceline.com was off 2 7/8, or 7.2%, to 37 1/8.

Kaiser Aluminum

(KLU)

said that rumors of any financial problems or Chapter 11 bankruptcy proceedings at the company are false.

Kaiser Aluminum said the rumors could stem from recent confusion about the bankruptcy filing of an unrelated company, Fairfax, Va.-based construction services firm

Kaiser Group

. Kaiser Group announced plans to sell two engineering units in a reorganization that includes a Chapter 11 bankruptcy filing. "There is zero relation to Kaiser Aluminum," a spokesman from Kaiser Aluminum told

Reuters

on Wednesday. The stock edged up 1/16 to 4 1/4.

Stein Mart

(SMRT) - Get Report

, up 3/4, or 7.4%, to 10 7/8, said it expects second-quarter earnings to be about 25% above the six-analyst estimate of a 25-cent profit.

Stein Mart was cut to buy from hold at

Wasserstein Perella

.

News that

Total System Services

(TSS) - Get Report

expects to report fiscal 2000 net income about 25% higher than 1999, when the company's earnings were 35 cents a share gave the stock a boost up 15/16, or 5.6%, to 17 13/16.

The company, which attributed the forecast to better-than-expected internal growth rate for its client base and expanded product offerings, said it expects earnings of 44 cents a share, which would beat the

First Call/Thomson Financial

one-analyst estimate of 42 cents.

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Analyst actions

Kerr-McGee

(KMG)

: UP to strong buy from buy at

Credit Suisse First Boston

. Still, the stock was down 3 3/8, or 5.6%, to 56 15/16.

Upgrades

Emerson Electric

(EMR) - Get Report

was 11/16 higher to 61 1/2 after it was UPped to recommended for purchase list from market outperformer at

Goldman Sachs

.

Intel

(INTC) - Get Report

: 2000 earnings estimate UP to $3.35 from $3.09 at

PaineWebber

. It didn't seem to help the stock, which stumbled 5 1/4 to 131 5/8.

Phillips Petroleum

(P)

: UP to intermediate accumulate, long-term buy from neutral, accumulate at

Merrill Lynch

. Despite the news, the stock declined 3 3/4, or 7.4%, to 47 1/4.

Downgrades

Caterpillar

(CAT) - Get Report

: DOWN to market outperformer from the recommended for purchase list at Goldman Sachs, 2000 earnings estimate: DOWN to $3.20 from $3.55, 2001 earnings estimate: DOWN to $3.65 from $4.20. Caterpillar slid down 13/16 to 35 3/16.

General Motors

(GM) - Get Report

: fiscal 2001 EPS DOWN to $11.84 from $12.33 at

UBS Warburg

. GM inched up 3/8 to 60.

MascoTech

(MSX)

: DOWN to hold from strong buy at

ING Barings

. MascoTech was off 1/2 to 10 3/4.

Oracle

(ORCL) - Get Report

: DOWN to market performer from buy at

J.P. Morgan

, REITERATED strong buy at CSFB. The stock fell 7 7/8, or 9.8%, to 72 5/16.

Initiations

CacheFlow

(CFLO)

: NEW attractive at

Bear Stearns

; price target: 72. CacheFlow edged up 7/8 to 60 13/16.

Community Health Systems

(CYH) - Get Report

: NEW intermediate, long-term buy at Merrill Lynch; price target: 20. The stock was up 3/8 to 16 3/16.

UbiquiTel

(UPCS)

: NEW buy at

Donaldson Lufkin & Jenrettre

. 18-month price target: $17. The stock was off 1/2, or 5%, to 9 1/2.

Group Moves

Salomon Smith Barney

lowered its rating on the U.S. semiconductor sector to neutral from outperform with several stocks included in the downgrade:

  • Advanced Micro Devices (AMD) - Get Report: DOWN to outperform from buy. The stock fell 9 7/8, or 11.7%, to 74 3/8.
  • National Semiconductor (NSM) : DOWN to outperform from buy. National Semiconductor sunk 8 3/16, or 13.3%, to 50 3/8.
  • Silicon Storage (SSTI) - Get Report: DOWN to hold from buy. The stock plummeted 15 1/16, or 15.2%, to 83 15/16.
  • Texas Instruments (TXN) - Get Report: DOWN to outperform from buy. TI was down 5, or 7.3%, to 64.

Merrill Lynch rolled out coverage of stocks in the semiconductor capital equipment industry:

  • Electro Scientific Industries (ESIO) - Get Report: NEW intermediate, long-term buy; price target of 62. The stock slid down 6 3/16, or 14.1%, to 37 13/16.
  • Metron Tech (MTCH) - Get Report: NEW intermediate, long-term buy; price target of 22. It crept up 1/16 to 12 9/16.
  • Therma-Wave (TWAV) : NEW intermediate, long-term buy; price target of 40. It was 1 21/32, or 7.7%, higher to 23 1/8.
  • GaSonics International (GSNX) : NEW intermediate accumulate, long-term buy; price target of 50. It was down 2 1/8, or 5.6%, to 35 5/8.
  • Photon Dynamics (PHTN) : NEW intermediate accumulate, long-term buy; price target of 80. The stock sunk 5 3/4, or 8%, to 66 1/4.

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Miscellany

Boeing

(BA) - Get Report

is close to a $5.5 billion deal for

International Lease Finance

to order 30 of its 777 planes, including eight of the newest long-haul models, reported

The Wall Street Journal

. Boeing ended the day up 1 1/8 to 42 13/16.

Saudi Arabia

agreed to boost its oil production by 500,000 barrels a day. Iran's

OPEC

Governor Hossein Kazempour Ardebili told

Reuters

that the group's output increase, which was agreed to on June 21, would be an adequate move to lower oil prices to a level of $25 without further increases. Ardebili said Tehran was working with Saudi Arabia to decrease oil, saying, "It seems the issue is not a shortage from the barrels but rather single products in a single market.

The United Arab Emirates, Kuwait and Algeria will most likely match Saudi Arabia and increase oil production to 500,000 barrels a day, according to OPEC sources reported in

Reuters

. An announcement is expected in the next few days.

Separately, Merrill Lynch cut its rating on

BP Amoco

(BPA)

to intermediate-term neutral from accumulate. The stock fell 4 7/16, or 7.6%, to 53 7/8.

PacifiCare Health Systems

(PHSY)

dropped 3 7/16, or 6.2%, to 51 7/8, after it said it will exit 15 mainly rural U.S. counties in five states in 2001, potentially affecting more than 26,600 members in its Medicare+Choice health plan. The company, which serves more than 1 million seniors and the disabled in the federally funded health program, said the move will affect less than 3% of its total Medicare HMO membership.

There are no county exits planned for California, the company's largest Medicare HMO market, Nevada, Oklahoma or Oregon. Alan Hoops, the company's president and CEO, said leaving counties was the last resort after it and other companies spent the last two years encouraging Congress to improve funding for the Medicare+Choice program. Hoops also confirmed that the company's business outlook for the second quarter and the year 2000 remains on track.

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By the Numbers

The data on NYSE and Nasdaq percent winners and losers are filtered to exclude stocks whose previous day's volume was less than 25,000 shares; whose last price was less than 5; and whose net change was less than 1/2.

Dow point gain and loss data are based on New York closing prices and do not reflect late composite trading.

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