VMware ( VMW - Get Report) plunged 33.9% after the company disappointed investors with its fourth-quarter results and said 2008 revenue could decelerate to 50% growth. For the fourth quarter, VMware said revenue rose 80% from a year ago to $412.5 million. That was lower than analysts' expectations of $417.4 million. Excluding items, EPS was 26 cents, two cents ahead of analysts' expectations. Shares of VMware were down $28.13 to $54.87.

Struggling bond insurer Ambac ( ABK) was a big winner, lately surging by more than 16%, after JPMorgan Chase ( JPM) disclosed that it had bought about another 2 million Ambac shares over the course of 2007. The bank increased its stake in the company to 7.7%. As of year-end 2006, JPMorgan's Ambac holdings had stood at 5.4%.

Ambac shares were leaping $1.79 to $12.92; JPMorgan was recently adding 1.2% to $46.75.

Countrywide Financial ( CFC) reported swinging to a fourth-quarter loss of $422 million, or 79 cents a share, from a year-earlier profit of $1.01 a share. The mortgage lender cited a $924 million credit-loss provision -- up more than twelvefold from last year, though slightly under the prior quarter -- as well as $831 million in impairment to "credit-sensitive" residuals.

The results widely miss Wall Street's call for a loss of 30 cents a share, per Thomson Financial. Still, they're a huge improvement from the third quarter's $2.85 shortfall. Furthermore, Bank of America ( BAC) CEO Ken Lewis, at the Citigroup Financial Services Conference in New York Tuesday, said that "everything is a go" regarding BofA's agreement to buy Countrywide.

Countrywide added 6.2% to $6.32 as BofA stock rose 1.5%.

Specialty drug company Pipex Pharmaceuticals ( PP) slid or $2.42, or 55.9%, to $1.77, after it announced the Food and Drug Administration will not accept as submitted its new-drug application (NDA) for oral Coprexa as a treatment of initially presenting neurologic Wilson's disease.

The FDA cited eight issues, including a request for an additional short-term reproductive drug safety study in animals and two preliminary assessments related to the adequacy of the clinical evidence of safety and efficacy of the drug.

Shares of Sprint Nextel ( S - Get Report) rose 83 cents, or 8.3%, to $10.80 following a Wall Street Journal report that the company is in talks with Clearwire ( CLWR) to create a high-speed wireless network using WiMax technology. Shares of Clearwire soared $2.89, or 23.2%, to $15.34.

Elsewhere, device maker Zimmer Holdings ( ZMH) was up 11.9% at $751.95 Tuesday after its quarterly and year-end earnings beat estimates.

The hip and knee implant maker earned $263 million, or $1.12 a share ($1.18 on an adjusted basis), in the quarter, vs. $224 million, or $1.02 a share, in the prior-year period. Revenue rose 15% year over year to $1.07 billion, bolstered by worldwide sales of reconstructive products. Analysts polled by Thomson Financial were looking for $1.04 a share on revenue of $1.03 billion.

For the year, the company earned $773 million, or $3.26 a share ($4.05 excluding items), down from $3.40 a share in 2006. Annual revenue was up 12% at $3.9 billion. Looking ahead, Zimmer is guiding between $4.20 and $4.25 a share, in line with estimates.

Shares of LECG ( XPRT) hit new lows, falling by 34% to $8.13, after shaving its fourth-quarter earnings forecast. Excluding charges, the Emeryville, Calif.-based provider of economic and financial analysis now expects revenue in the range of $87 million to $89 million, resulting in earnings of 13 cents to 14 cents a share, down from previous guidance for EPS of 24 cents to 26 cents. Two analysts polled by Thomson Financial are expecting EPS of 25 cents.

One of the few big gainers, New York's Quadra Realty ( QRR) blasted off 33.7% to $10.64 on news that Hypo Real Estate Capital Corporation would buy 65% of Quandra's outstanding stock for about $10.65 a share. Quadra, a commercial real estate finance company, also announced it would pay a dividend of about 35 cents to shareholders on the date of expiration of the tender offer, resulting in an total value of $11 a share for investors. This price tag represents a 38% premium over the stock's close on Monday.

This article was written by a staff member of TheStreet.com.