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Tech stock rebound doesn't stick

After climbing out of an earlier hole, technology stocks once again drift lower, though they did manage to avoid the slump seen by the Dow.

After climbing out of an earlier hole, technology stocks once again drifted lower today, though they did manage to avoid the slump seen by the Dow.

The blue chip index took a relentless beating in today's trading, as investors continued another round of heavy profit-taking in a market that many consider overpriced.

The Dow Jones Industrial Average tumbled 143.41 points or 1.55 percent to close the day at 9,120.67. The Nasdaq Composite Index dropped 5.91 points or 0.25 percent to end 2,338.81.

The Dow continued to slide despite a flurry of robust earnings announcements, including strong reports from IBM, Sun Microsystems, and other technology bellwethers.

Sun turned around from an earlier decline, but still closed 0.25 percent lower. IBM fell 8.76 percent despite beating Wall Street earnings estimates.

BancBoston Robertson Stephens managing director and senior hardware analyst Dan Niles today downgraded his rating on IBM to "long-term attractive" from "buy," citing valuation and hardware performance. Niles also noted that Big Blue's revenue growth was only at 6 percent, and that the company saw a 2 percent drop in hardware revenues.

Cisco Systems rose 1.48 percent. Dell Computer dropped 1.41 percent, while its rival, Compaq Computer, slipped 3.28 percent. Intel shed 3.46 percent.

Sybase, which posted earnings that beat expectations, partly on lowered costs, soared 20.44 percent. BMC Software climbed 13.94 percent.

TCI Satellite Entertainment Group fell 57.32 percent after the company's satellite television unit, Primestar, was acquired this morning by DirecTV, a subsidiary of Hughes Electronics.

Initial public offerings, however, continued to do well despite the volatile climate.

For example, Allaire Corporation, a developer of Web software, rocketed 21.53 percent to 43.75 in its first day of trading. The company priced at 20 per share and sold 2.5 million shares, raising $50 million.

3D graphics company Nvidia jumped 64.06 percent to close at 19.69 today, following its IPO at 12 per share.

Internet stocks, which were bleeding heavily earlier, seem to have gotten a transfusion and were showing signs of life.

Amazon.com soared 16.04 percent and America Online dropped 0.31 percent. Yahoo and Excite, meanwhile, jumped 7.64 percent and 2.33 percent, respectively.

Lycos tumbled 5.88 percent, and Preview Travel, which earlier dropped a hefty 10.75 percent, dropped 3.49 percent.

Analysts agreed that Internet stocks are undergoing an "adjustment" to bring their valuations back down to earth. However they stopped short of labeling the situation as a more severe "correction."