(Updated from 7:50 p.m. EDT)

Shares of

Yahoo!

(YHOO)

, which posted a modest gain during the early part of tonight's extended trading session, tumbled almost 8% following a conference call with analysts and reporters.

After the closing bell, the Internet bellwether announced that it earned 13 cents a share in the third quarter excluding certain items, a penny better than analysts expected. Postclose traders on

Island

ECN initially lifted the stock 63 cents, or 0.8%, to $83.31. On

Instinet

, Yahoo! gained 50 cents, or 0.6%, to $83.19. (

TheStreet.com

covered Yahoo!'s report in a separate

story.)

After the conference call this evening, however, Yahoo!'s stock dropped. On Island, the Net name fell $6.56, or 7.9%, to $76.13, with volume of 1.15 million shares. In an interview with

TheStreet.com

, Yahoo! Chief Operating Officer Jeff Mallett said, "It's clear the market as a whole is going to be challenging for the next couple of quarters.

"Maybe some investors were hoping it would all just go away. That's very shortsighted," he added. "It will take a while before this settles a bit."

For the fourth day in a row, the

Nasdaq Composite Index ended down, dropping 115.03, or 3.4%, to finish at 3240.53. The technology-laden measure is now nearly 2000 points off its all-time high.

Investors, who have seen the Nasdaq taken down by a long list of technology names recently, have been waiting for an incentive to jump back into the market. In tonight's busy extended trading session, market players thought

Yahoo!

(YHOO)

gave them a reason to be, well, cautiously optimistic. But that did not last long.

In addition to Yahoo!'s troubles tonight,

Lucent

(LU)

TheStreet Recommends

cut its growth outlook for the fourth quarter. The telecom-equipment giant, which has already warned twice this year, attributed the shortfall to weakening optical-equipment margins, slowing circuit switching sales, and a rising bad debt reserve.

Since January, the first time that Lucent lowered its expectations, the company's shares have decreased by nearly two-thirds in value. The company said that it expects to report earnings of 17 cents to 18 cents a share, down from 24 cents a year earlier and far short of Wall Street's 27-cent estimate.

Lucent, which closed the regular session down $1 to $31.31, was off $6.31 to $25 on Instinet. (

TheStreet.com

covered Lucent's warning in a separate

story.) On the heel's of Lucent's statement, shares of Nortel dropped $2.69, or 4.3% to $60.44.

In other earnings news, Mobile phone giant

Motorola

(MOT)

listed results tonight that met analysts' expectations. The company announced earnings of 26 cents a share, a penny better than Wall Street's targets.

Motorola is expected to hold a conference call Wednesday morning to speak with analysts about the results. That call will likely guide the market's reaction to Motorola's earnings tomorrow. (

TSC

talked about

Motorola's earnings in another article.) In after-hours activity, Motorola was down $1.88, or 6.8%, to $25.63 on

Redibook

ECN.

Results from

Biogen

gave the after-hours crowd mild encouragement. After the bell, the biopharmaceutical company posted a 44-cent profit, beating analyst expectations by a penny. On Instinet, Biogen was up $1.75, or 3.3%, to $53.25, with 38,000 shares changing hands. (

TheStreet.com

covered Biogen's report in a separate

story.)

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.