The Nasdaq composite index closed at 2,169.95, down just 0.83 for the session, after being down more than 65 points in the morning. The Dow Jones industrial average gained 26.29 points to end the day at 10,948.38.
Nokia initially sent stocks reeling after the company said its second-quarter earnings will fall short of consensus estimates. Nokia said it expects second-quarter earnings to be in the range of 13 cents to 14 cents per share, down from the 17 cents a share it predicted earlier. According to First Call, the handset maker was expected to report a profit of 18 cents a share.
Shares of Nokia fell $5.45 to $23.26. Rival Motorola was down 86 cents to $14. Ericsson was down 20 cents to $5.30. RF Micro Devices, a chip supplier to handset makers, fell 61 cents to $25.80. Texas Instruments dropped $1.91 to $34.90.
PC and storage stocks were also active. In a research note, Morgan Stanley analyst Gillian Munson upgraded Dell Computer from "neutral" to "outperform" and set a target price of $33. Dell shares were up 84 cents to $26.10. Shares of Compaq Computer and Apple Computer rose 12 cents to $15.57 and 27 cents to $20.31, respectively, after being mentioned in Munson's report.
Munson also cut her earnings targets for EMC, which saw shares fall 17 cents to $31.74.
Networking and telecommunications equipment stocks generally remained weak. Cisco Systems fell a penny to $20.37. Lucent Technologies lost 10 cents to $7.94, and Nortel Networks was down 24 cents to $11.80. Juniper Networks rose 30 cents to $35.63.
Among other actively traded tech issues, Intel was down 20 cents to $30.13. Oracle slid 4 cents to $16.15. Microsoft dipped 4 cents to $72.08, and Sun Microsystems rose 32 cents to $17.20.
Staff and Reuters contributed to this report.