The Night Watch: Earnings Warnings Abound in After-Hours Action -- and Stocks Paying the Piper

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(Updated from 7:43 p.m. EDT)

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Bill Clinton and

bell-bottoms,

Nasdaq stocks were today's comeback kids.

But while components of the tech-laden index saw big price movements during the regular trading day -- the Nasdaq closed 84.29 points higher -- activity among large-tech issues quieted in tonight's extended session.

Technology stocks have given back a small portion of their daytime gains. On

Island

ECN, shares of big gainers --

BroadVision

(BVSN) - Get Report

,

Crossroad Systems

(CRDS)

, and

Covad Communications

(COVD)

-- all closed slightly lower.

Tonight's three biggest losers on

Instinet

were, not surprisingly, the companies that issued profit warnings after the market's close.

TRW

(TRW)

, a manufacturer of automotive and spacecraft systems, announced that it expects third quarter earnings to be below Wall Street estimates of $1.05 a share. The company attributes the shortfall to the weakening of foreign currencies and production cutbacks announced by

Ford

(F) - Get Report

.

TRW dropped $5.25, or 11.6%, to $40.

Similarly,

SpeedFam

(SFAM)

, a manufacturer of semiconductor devices, stated that it expects to report a first-quarter loss of 23 to 27 cents a share. Analysts had expected the company to earn 12 cents a share.

Shares of SpeedFam lost $5.25, or 32.7%, to $10.81.

Finally,

Gadzoox

(ZOOX)

, a manufacturer of data storage devices, announced that it expects second-quarter sales to fall 15% to 25% below analysts' forecasts of $9 million, due to slow market acceptance of its new line of network switches.

Gadzoox lowered $2.31, or 22.4%, to $8.

Meantime, shares of

Read-Rite

(RDRT)

, which boosted $2.75, or 35.2%, to $10.56 in the regular session, saw a little profit-taking in nighttime trading. The company, which manufactures storage device equipment, topped both Island ECN's and Instinet's lists of active stocks. Read-Rite ended 25 cents lower to $10.31 on Island, and fell 44 cents to $10.12 on Instinet.

Wednesday night, the company announced that it has built a new fiber-optics company,

Scion Photonics

, with $25 million in funding from

Tyco Ventures

and

Integral Capital Partners

. Read-Rite also said that it was in talks with in discussions with interested groups for more technology and capital investments.

Meantime, shares of

Yahoo!

(YHOO)

-- which closed the regular session down $5.13, or 4.57% -- recovered ground in twilight trading. The Internet bellwether closed up $1.31 to $108.25 on Island ECN. The stock gained $1.06 to $108 on Instinet.

This morning,

Lehman Brothers

analyst Holly Becker said that she maintains her cautious outlook on Yahoo!, but is confident that near-term results are not at risk.

About a week and a half ago, Becker raised concerns about the flagging market for online advertising. On Aug. 28, Lehman Brothers analyst Holly Becker said that it was only a matter of time before the slowdown in dot-com spending would affect Yahoo!'s results. Additionally, an article in last Friday's

Wall Street Journal

echoed Becker's worries that the tech bellwether will suffer from a slowdown in online advertising.

Today,

Merrill Lynch's

bullish Internet analyst,

Henry Blodget, cautioned investors that he expects more third-quarter earnings warnings from online advertising agencies. Blodget, however, said that

America Online

(AOL)

,

Yahoo!

(YHOO)

and

Doubleclick

(DCLK)

will likely meet or modestly beat expectations.

In its quest to build a profitable business,

Peapod

(PPOD)

today announced that it has purchased some of rival

Streamline.com's

(SLNE)

operations. The online grocer, also said that it will pull out of the Texas and Ohio markets. (

TSC

covered Peapod's

latest news in a separate story.)

Peapod's announcement encouraged investors, who sent its stock up 19 cents, or 9.4%, to close today's session at $2.19. In after hours trading on Island, the stock lowered 14 cents to $2.05.

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, owned by Datek Online, offers trading, mainly in Nasdaq-listed stocks, from 7 a.m. to 8 p.m. EDT.

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.