Electronic Data Systems (NYSE: EDS) issued a chilling earnings warning after the bell yesterday, and other computer services companies are paying for it today.

Electronic Data said it would likely earn only $0.12 to $0.15 a share in the third quarter, nowhere near the $0.74 it expected. Much of the shortfall is the result of reduced spending from existing customers, fewer new sales, and the company's increased spending on "sales pursuits and processes to leverage an increased business pipeline." Also hurting earnings is a writedown related to the bankruptcy of US Airways.

Electronic Data stock is down about 45% at midday, and investors have been punishing other companies in the sector as well. The world's top provider of computer hardware and services, IBM(NYSE: IBM), lost 6%. Sun Microsystems(Nasdaq: SUNW), Computer Sciences Corp.(NYSE: CSC), and Accenture(NYSE: ACN) all lost 10% or more. Even PC makers like Dell(Nasdaq: DELL) and Hewlett-Packard(NYSE: HPQ) are feeling downward pressure, as investors wonder if consumers will be forced to rein in spending.

To be sure, Electronic Data has serious problems. But perhaps Wall Street is overreacting with the rest of the sector, especially IBM. After seeing earnings estimates cut today by several analysts, a spokesman for Big Blue told Bloomberg, "Based on what we understand, and given the substantial miss, the key issues appear to be unique'' to Electronic Data.

Now near a four-year low, this Big Blue chip might warrant a spot on your watch list.