NEW YORK (CNNfn) - Disappointing financial news from an office supply retailer sank the entire sector Tuesday, while a pair of innovative product developments sent shares of a drug maker and an online bookseller soaring.
Shares of office supply retailer Office Depot (ODP) led the industry downward, falling 3-1/4, or 24 percent, to 10-1/2 after the company late Monday warned it would not meet earnings forecasts.
Delray Beach, Fla.-based Office Depot said earnings per share in the second half of the year would range between 30 and 40 cents, well off the 50 to 52 cents per share analysts had expected. PaineWebber and Deutsche Bank Alex Brown downgraded the company. 
Investors rushed to sell shares of Office Depot's major competitor, Staples (SPLS), after PaineWebber cut the stock's rating to "attractive" from "buy."
Stock in Framingham, Mass.-based Staples fell 2-5/16, or 11 percent, to 19-5/8. Nearly 15 million shares changed hands, making Staples the most actively traded Nasdaq stock.
Office Max, the smallest of the three major office retailers, also suffered. Shares of the Shaker Heights, Ohio-based retailer dropped 11/16, or 8 percent, to 7-7/16.
One of the session's biggest gainers was Amylin Pharmaceuticals Inc. (AMLN), which rose 1-13/16, or 73 percent, to 4-5/16 after the biotech company said its leading diabetes drug candidate, Symlin, showed early signs of success.
Fatbrain.com (FATB), which calls itself the Internet's most comprehensive professional bookstore, rose 3-5/8, or 24 percent, to 18-5/8 after unveiling what it said is a secure publishing program that allows authors to sell works online, earning '"significant" royalties on every copy sold.
Bank of America upgraded Santa Clara, Calif.-based Fatbrain.com to "strong buy" from "buy."
And the rage over Linux, the popular computer operating system whose ties to any company has sent shares higher, is over -- for at least a day.
Stock in Applix (APLX), a software maker seen benefiting from the spread of Linux, fell 4, or 21 percent, to 15-5/8. Ariel Corp. (ADSP), a supplier of Linux-based access devices for Internet service providers, dropped 2, or 30 percent, to 4-9/16.
The declines occurred after both companies' stock soared over the last several sessions on hope that Linux will become the dominant operating system, replacing Microsoft's Windows.
Finally, shares in Hauppauge, N.Y.-based Microwave Power Devices Inc. (MPDI) fell 1-31/32, or 19 percent, to 8-9/32 after the company warned revenue and earnings per share for the third quarter will be "materially" lower than the previous quarter.
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