CHICAGO (CNN/Money) - Technology stocks received a rude awakening Tuesday from AOL Time Warner, which warned of declining revenue in its online service business.

In a presentation to investors early in the day, AOL Time Warner -- parent company of CNN/Money -- said that it expects a steep decline in advertising and commerce revenue in 2003 for its America Online unit. AOL Time Warner (AOL: Research, Estimates) shares plunged $2.36, more than 14 percent, to close at $14.21. (See more.)

"When someone of Don Logan's [chairman of the AOL Time Warner media and communications group] caliber finally commits to a number, at least there's some solidity in it," said John Tinker, analyst at Blaylock & Partners. "But obviously, there were some people who were surprised when he said [EBITDA would be] down 15 to 25 percent next year."

Logan also told investors that the company's turnaround plan is in order. Though investors reacted unfavorably to AOL's revenue forecast, they may be able to shake it off quickly in light of the longer-term outlook.

"The message out of the AOL meeting was: We're getting back in touch with our subscribers, and we anticipate growing again," Tinker said. "They put together a very coherent, realistic presentation, but no one likes to see down numbers."

The Nasdaq Composite Index fell 35.82, or 2.4 percent, to close at 1,448.96, driven largely by AOL's announcement, although investors also digested a bit of doom and gloom from Nokia. (See more.)

The wireless telecommunications firm said it expects industry-wide growth of cell phone handset shipments of about 10 percent in 2003. Although that's in line with most Wall Street forecasts, it's well below the growth estimate Morgan Stanley delivered Monday, which sparked a flurry of buying in the wireless sector.

Nokia also said it expects the mobile infrastructure market to decline 20 percent next year. Nokia (NOK: Research, Estimates) shares fell 93 cents to $19.22.

Other wireless telecom-related companies falling in sympathy with the news included Motorola (MOT: Research, Estimates), which lost $1.19 to $10.51, Lucent Technologies (LU: Research, Estimates), down 9 cents to $1.80, and AT&T Wireless (AWE: Research, Estimates), which shed 48 cents to $7.57.

Perhaps thinking that no news is good news, Cisco executives told a group of analysts that it won't give guidance on its current fiscal second quarter earnings. Cisco (CSCO: Research, Estimates) shares fell 54 cents to $14.52.

A trio of software companies, however, gave investors reason for hope. Citrix Systems (CTXS: Research, Estimates) added $1.26, or 11 percent, to $12.69 after the company raised its fourth-quarter earnings guidance.

Siebel Systems (SEBL: Research, Estimates) rose 15 cents to $8.75 after the company's chief executive said fourth-quarter IT spending appears to be more robust than in the previous quarter.

Veritas Software (VRTS: Research, Estimates) climbed 49 cents to $17.95 after the company's chief executive said it was on track to meet Wall Street's revenue forecast.