NEW YORK (CNNfn) - A slew of analysts took a bite out of Apple Computer Friday, downgrading the stock and reducing their earnings estimates after the personal computer maker warned its fiscal fourth-quarter earnings will miss Wall Street forecasts.
Bear Stearns, Banc of America, SG Cowen, Merrill Lynch, Morgan Stanley Dean Witter and PaineWebber all slashed their ratings on Apple Computer (AAPL: Research, Estimates).
PaineWebber drastically cut its 12-month price target on the stock to $35 from $56. Merrill Lynch cut its fiscal year 2001 earnings per share estimate to $1.60 from $2.08.
And Lehman Brothers revised its fiscal year 2001 estimate to $1.90 a share from $2.10. The brokerage maintained its "neutral" rating, but said it remained cautious about the stock.
The company warned late Thursday its earnings for the quarter will fall as much as 33 percent short of forecasts due to a sales slowdown.
Shares of Apple plunged $27.13, or more than 50 percent, to $26.38 in midmorning trading.
Other PC makers cut
Bear Stearns also cut its ratings on some other computer makers, lowering both Gateway (GTW: Research, Estimates) and Dell Computer (DELL: Research, Estimates) to "neutral" from "buy."
And it reduced Hewlett-Packard (HWP: Research, Estimates) and Compaq  Computer (CPQ: Research, Estimates) to "attractive" from "buy."
A leading chip maker saw its earnings estimates lowered. Robertson Stephens reduced Micron Technology (MU: Research, Estimates) fiscal year 2001 revenue estimate to $10.8 billion from $11.4 billion and cut its earnings per share estimates to $4.45 from $4.72. But it kept a "buy" rating on the stock.
UAL skids
The airlines sector got mixed reviews from Merrill Lynch analyst Michael Linenberg, who downgraded UAL (UAL: Research, Estimates), the parent company of United Airlines, to "accumulate/accumulate" from "accumulate/ buy."
Linenberg also cut his fiscal year 2000 earnings per share estimate to $4.75 from $5.80 and 2001 to $6.50 from $8.00.
UAL warned Friday it expects to post a loss in the third quarter and possibly the fourth quarter of 2000.
Linenberg also downgraded America West Holdings (AWA: Research, Estimates) and lowered earnings estimates on Delta (DAL: Research, Estimates), America West and Alaska Air (ALK: Research, Estimates). But he upgraded Southwest Airlines (LUV: Research, Estimates). 
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