Updated from 12:51 p.m. EDT

Shares of Interwave Communications ( IWAV) fell 41.1% Friday after the company's $56 million merger with Alvarion ( ALVR) fell through.

In July, Interwave agreed to be acquired by Alvarion for $5.75 a share in cash. In announcing its unwillingness to go forward with the deal, Alvarion said Friday that Interwave has "experienced a material adverse effect with respect to its business." Alvarion said it would be willing to discuss concluding a transaction on different terms. Interwave says that it "strongly and vehemently disagrees with Alvarion's position and intends to pursue all available alternatives." Shares of Interwave traded down $2.36 to $3.38, while shares of Alvarion traded up 55 cents to $13.49.

Redback Networks ( RBAK) fell 34.1% after the company warned that third-quarter sales would fall well below expectations. The maker of networking equipment expects sales of $20 million to $22 million, well below the forecast of $34 million from analysts polled by Thomson First Call. Redback said that order delays and softness in orders for its SMS products led to the weak sales outlook. Shares traded down $1.78 to $3.44.

Shares of Evolving Systems ( EVOL) rose 40.3% after the company signed a VoIP contract with a major telecom carrier. Under the deal, the telecom carrier will use Evolving's OrderPath solution to manage porting for multiple affiliates from a single system. The system is expected to be operational by early 2005 and the majority of the sales from the transaction will be recognized during the fourth quarter of 2004. Shares traded up $1.24 to $4.32.

Renaissance Learning ( RLRN) fell 13.9% after the company warned that its third-quarter earnings and sales would fall short of expectations. The educational software company expects third-quarter earnings of 11 cents to 12 cents a share on sales of $25.3 million to $25.8 million. Analysts had been expecting earnings of 23 cents on sales of $31.5 million. Looking ahead, Renaissance said that it expects fourth-quarter earnings and sales to be below year-ago levels, when it earned 25 cents a share on sales of $31.4 million. Analysts are looking for fourth-quarter earnings of 24 cents a share on sales of $32.2 million. Shares traded down $3.01 to $18.66.

Shares of Sonic Innovations ( SNCI) fell 12.3% after the company warned that its third-quarter earnings and sales won't meet expectations. The maker of digital hearing aids expects to post a third-quarter loss of 2 cents to 4 cents a share on sales of $22 million to $23 million. Analysts had been expecting a profit of 3 cents a share on sales of $24.3 million. Shares traded down 56 cents to $4.

Other technology volume leaders included Intel ( INTC), up 79 cents to $20.85; PeopleSoft ( PSFT), up $2.98 to $22.83; Oracle ( ORCL), up 62 cents to $11.90; Sirius Satellite Radio ( SIRI), down 6 cents to $3.14; Microsoft ( MSFT), up 60 cents to $28.25; and Cisco ( CSCO), up 83 cents to $18.93; and Lucent ( LU), down 1 cent to $3.16.

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