The worst performer in our index last week was Creative Technology (nasdaq: CREAF - news - people ), which lost 3% to end at $6.43. On June 27 the company, which makes portable MP3 players that compete with Apple Computer`s (nasdaq: AAPL - news - people ) iPod, lowered its fourth-quarter sales outlook. The company said it now expects sales growth of 50% instead of the 65% to 80% it previously forecast. Sales will come in at about $300 million.

Creative blamed sluggish overall demand and said that lower average selling prices would cause a drop in gross margin, which is now expected to be under 20% compared with earlier guidance between 22% and 24%. As such the company now expects to report an operating loss for the fourth quarter. The warning took down stocks of other players in the sector including Apple, PortalPlayer (nasdaq: PLAY - news - people ) and SigmaTel (nasdaq: SGTL - news - people ). The latter two companies make components for a range of digital music players.