Gateway

(GTW)

was down 33.9% in preopen

Instinet

trading after its warning late Wednesday that fourth-quarter results would fall well short of expectations after sales slowed markedly. CFO John Todd said the PC maker expects a price war in the industry early next year due to high inventory levels.

Lehman Brothers

slashed its price target to $35 from $85 and lowered earnings estimates. Other PC makers were falling as well.

Dell

(DELL) - Get Report

was down 9.5% in preopen

Island

trading.