Investors spooked by an earnings warning from

SCI Systems

(SCI) - Get Report

were giving

Hewlett-Packard

( HWP) and

Compaq

( CPQ) the business in early trading Wednesday.

SCI, which makes electronics components, PCs and set-top boxes on contract for a wide range of customers, said that it expects to miss the earnings expectations for its first quarter, ending Sept. 30, because of weak demand for consumer electronics and PCs. The company said it expects to earn 34 cents a share, below the

First Call/Thomson Financial

consensus of 38 cents a share.

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SCI wouldn't specify which customers weren't buying as much. But its two largest, H-P and Compaq, were solidly lower on heavy volume. H-P was off $3.88, or 3.5%, to $107.13 on 2.9 million shares, while Compaq was down 94 cents, or 2.9%, to $30.56 on 12.9 million shares.

The rest of the PC sector was escaping the selling. The

Philadelphia Computer Boxmaker Index

was down just 0.34%.

Investors will have to weigh Wednesday's news against recent accounts of a sharp rebound in demand last month. The latest

Boswell Report

, a survey of electronics stores published by market research firm

Allison Boswell Consulting

, describes a 60% increase in PC unit shipments in August from July. But it doesn't help that SCI's warning comes one day after contract manufacturer

Solectron

( SLR) spoke of rather tepid future PC demand in its earnings conference call.