(Updated from 7:20 p.m. ET)

The bell may have rung, but ugly Monday isn't over. Indeed, stocks, which tumbled in the daytime session, were doing some further falling in extended-hours trading as companies continued their stream of unpleasant earnings confessions. Tonight's danger zone lay in the software sector.

Agile Software

(AGIL)

was plummeting on both

Island

ECN and

Instinet

after business-to-business software company

Ariba

(ARBA)

said it was scrapping its planned acquisition of the San Jose, Calif., company. The stock recently gave up 10.3% to $9.44 on Instinet, and 11.1% to $9.35 on Island. Volume was heavy on both platforms.

In a prepared statement, the companies cited the "challenging economic and market conditions," and said they have mutually agreed to terminate their proposed merger agreement without payment of any termination fees.

"We are disappointed that adverse economic and market conditions prevent the merger with Agile from proceeding as planned," Ariba said.

Investors also sent Ariba's beaten-down stock tumbling 15.4% to $5.50 on Island, down from its new 52-week low of $6 today. And no wonder. The company also

warned tonight of a second-quarter earnings shortfall and disclosed plans to cut about 700 employees, or one-third of its workforce.

Ariba's warning recalls a string of announcements from software firms. This morning,

i2 Technologies

(ITWO)

lowered its first-quarter outlook and speculated on the possibility of layoffs. Its shares closed up at $15.44 during the day's regular session on the

Nasdaq. But in after-hours action, it lost 3.5% to $14.90 on Island.

Rivals

Commerce One

(CMRC)

and

Art Technology

(ARTG)

were faring no better. On Island, shares of Commerce One were down 8.3% to $7.20, while Art Technology slid 3.8% to $5.74. Art Technology, which is based in Cambridge, Mass., had its own

first-quarter confession earlier in the day that sent the shares free falling to a new 52-week low of $5.94 on Nasdaq.

With eerie echoes,

Broadvision

(BVSN) - Get Report

, an e-commerce software firm, sharply lowered its first-quarter guidance tonight, citing the slowing economy and reduced information technology spending. And the company set plans to terminate about 325 workers, or 15% of its workforce. Investors on Island lately sold off on the shares, sending them down 16.7% to $3.75.

And just when you're wondering if it'll ever end,

Inktomi

(INKT)

issued a second-quarter warnings after today's close, and said it would -- yes, you guessed it -- hand out those pink slips. And the shares plummeted by 26.1% to $4.60 on Island.

Also, online security software company

Entrust Technologies

(ENTU)

took a beating in a knee-jerk response to its first-quarter earnings warning, which also came after the bell. The shares were off 27.9% to $5.25.

With bad news like this, most tech bellwethers were mired in the red. Software giants

Cisco Systems

(CSCO) - Get Report

,

Juniper Networks

(JNPR) - Get Report

and

Oracle

(ORCL) - Get Report

were off their closing prices on both extended-hours trading platforms. Juniper fared especially poorly, losing 4.2% to $34.32 on Instinet.

But the software companies are not alone.

Redback Networks

(RBAK)

, one of the latest casualties in the beleaguered telecom sector, said this evening that it expects to sharply miss first-quarter earnings. The company, based in Sunnyvale, Calif., also announced job cuts of about 150 workers, or 12% of its workforce. The shares fell 13.2% to $10.15 on Instinet.

And copier giant

Xerox

(XRX) - Get Report

recently slid 8.3% to $5.50 on Instinet after the company

delayed its annual 10-K filing with regulators in order to review its books.

Bucking the trend, however, was another telecom equipment company,

New Focus

(NUFO)

, which climbed 7.9% to $12.40 on Instinet after the company reaffirmed its first-quarter revenue outlook of $38 million to $41 million.

This information is provided by Instinet, a wholly owned subsidiary of Reuters (RTRSY) . For further information, please contact Instinet at www.instinet.com.

Island ECN offers trading, mainly in Nasdaq-listed stocks, from 7 a.m. to 8 p.m. EST.

Confused?

TheStreet.com

explains how the rules change when the sun goes down in Investing Basics: Night Owl, a section devoted to after-hours trading.