Updated from 12:49 p.m. EDT

Shares of Gateway ( GTW) were among the worst-performing technology stocks Thursday, falling 9.2% after the company warned that first-quarter sales would come in below expectations.

Excluding items, the computer maker now expects fourth-quarter earnings of 3 cents to 4 cents a share, up from previous guidance of 1 cent to 2 cents a share. Fourth-quarter sales, meanwhile, are now expected to be between $1 billion and $1.025 billion, compared with the $975 million to $1.025 billion Gateway previously expected. Analysts polled by Thomson First Call are expecting earnings of 2 cents a share on sales of $1.02 billion.

Looking ahead, though, Gateway predicted that first-quarter sales would show a "seasonal decline of 15% or greater" on a sequential basis. Based on fourth-quarter estimates, that would put first-quarter sales at $850 million to $872 million. Analysts had been expecting sales of $926.4 million. Shares traded down 59 cents to $5.95.

Activision ( ATVI) rose 4.7% after the company raised its third-quarter earnings and sales guidance above Wall Street estimates. The video game publisher now expects earnings of 55 cents a share on sales of $615 million, up from previous guidance of 49 cents a share on sales of $500 million. Analysts surveyed by Thomson First Call had been expecting earnings of 50 cents a share on sales of $505.4 million. Activision said that "better-than-expected consumer response to its holiday slate and catalog titles, as well as the strength of its distribution and value divisions" led to the upward revision. Shares traded up 88 cents to $19.50.

Shares of Radica Games ( RADA) fell 9.9% after the company warned that fourth-quarter sales are tracking below its expectations. Radica said that a reduction in orders from a major customer that normally accounts for about 33% of the company's fourth-quarter sales led to the outlook. The company also experienced production shortages and shipping delays, which were caused by U.S. port congestion, according to the company. Gross margins during the fourth quarter, meanwhile, have also been hurt by shipping and material costs. As a result, Radica expects fourth-quarter "earnings per share to be in single digits." Shares of Radica traded down 91 cents to $8.28.

Wave Systems ( WAVX) rose 6.3% after the company said it received an order from the U.S. Military Academy's IT Operations Center. As part of the deal, Wave Systems will provide a suite of technology products for West Point's Secure Dissemination and Data Retrieval Computer System project. Financial terms were not disclosed. Shares traded up 8 cents to $1.36.

Shares of Symantec ( SYMC) and Veritas Software ( VRTS) traded actively Thursday after Symantec agreed to buy Veritas for about $13.5 billion in stock. Under the terms of the deal, Veritas shareholders will receive 1.1242 shares of Symantec for each Veritas share they own. After the acquisition is completed, Symantec shareholders will own 60% of the combined company, while Veritas shareholders will own 40%. The deal, which is expected to close during the second quarter of 2005, is expected to be accretive during the first combined year of operations. Shares of Symantec traded down $2.25 to $25.13; Veritas traded down 12 cents to $27.99.

Other technology volume leaders included Sirius Satellite Radio ( SIRI), down 47 cents to $7.18; Microsoft ( MSFT), up 5 cents to $27.16; Cisco ( CSCO), unchanged at $19.40; Lucent ( LU), up 13 cents to $3.73; Nextel Communications ( NXTL), up $1.08 to $29.78; and Intel ( INTC), down 27 cents to $22.87.

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