Andrew Neff, an analyst at Bear, Stearns & Co, lowered his recommendation for IBM to "peer perform" from "outperform."
The shares have gained 4.9 percent this year.
Concern that Microsoft and IBM's reports signal lower profits for the rest of the industry hurt other computer-related shares.
Oracle Corp, the world's third-largest software company, declined US$0.73 to US$11.44; Hewlett-Packard Co, the second-biggest computer maker, fell US$0.76 to US$19.23; Cisco Systems Inc, the largest supplier of computer-networking equipment, shed US$0.77 to US$14.13.
Intel Corp., the biggest semiconductor maker, lost 86 cents to US$16.34; and Applied Materials Inc, which supplies machines that make chips, slid 81 cents to US$13.53.
Advanced Micro Devices Inc plunged US$1.17 to US$6.03. Intel's main rival in personal-computer processors said its fourth-quarter loss widened as sales slid and costs rose for firing workers and developing new semiconductors.
General Electric Co slipped US$0.15 to US$24.88. The maker of products ranging from medical equipment to jet engines said fourth-quarter earnings dropped 21 percent from a year earlier, meeting the average forecast of analysts surveyed by Thomson First Call.
Merck & Co fell US$0.51 to US$58.34. The New York attorney general is investigating whether the drugmaker violated state laws by using a pharmacy subsidiary to boost market share for its products.
Veritas Software Corp slipped US$0.80 to US$17.47. The company said it's restating fiscal 2000 and 2001 results after a review of fees paid by AOL Time Warner Inc. The revision wiped out US$20 million in revenue and US$20 million in expenses.
EBay Inc rose US$3.60 to US$74.85. The top Internet auctioneer said fourth-quarter net income more than tripled and raised its profit forecast for this year.
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