MARKET CLOSE: Dow, Nasdaq lose ground

Even though the much-anticipated Consumer Price Index numbers were better than expected, investors sold off stocks across the board Wednesday as the Dow Jones industrial average plunged 109 points to 10,801.42 and the Nasdaq shed 54 points to 2,814.16.

Everyone expected stocks to open higher Wednesday morning after the August CPI rose by 0.3 percent. The co-called "core" CPI, which excludes food and energy prices, rose by a milder-than-expected 0.1 percent.

"It's been a stock pickers market for some time," said Charles Payne, head analyst at Wall Street Strategies, an independent market research firm. "And the whole realm of stocks that are doing well is getting smaller and smaller."

Chip-equipment stocks, which made strong gains Tuesday, retreated as Applied Materials Inc. (AMAT) fell 3 7/16 to 78 1/8 and Novellus Systems Inc. (NVLS) lost 3 13/16 to 63 15/16. KLA-Tencor Corp. (KLAC) tumbled 3 9/16 to 69 13/16.

Intel Corp. (INTC) shaved off 2 13/16 to 83 while Advanced Micro Devices Inc. (AMD) and International Business Machines Corp. (IBM) dropped 3/4 and 1 5/16 a share, respectively.

NetSilicon Inc. (NSIL) soared up 5 3/8 to 12 3/8 in its initial public offering. NetSilicon had priced shares at $7 each, below their $8 to $10 price range.

Advanced Fibre Communications (AFCI) climbed 11/16 to 20 1/4 after an upgrade from SG Cowen boosted yesterday's bullish forecast by BancBoston Robertson Stephens. Manugistics Group Inc. (MANU) lost 1 15/16 to 10 13/16 after it reported a second-quarter loss of 13 cents a share, far below First Call's estimated profit of 2 cents a share. It also announced the resignation of its chief financial officer two weeks ago.

Dell Computer Corp. (DELL) trimmed 3/8 to 46 11/16. Gateway Inc. (GTW) slid 1 7/8 to 47 5/16 and Apple Computer Inc. (AAPL) plunged 2 7/16 to 75 3/8. Compaq Computer Corp. (CPQ) closed off 3/8 to 23 5/8.

Microsoft Corp. (MSFT) lost 2 7/16 to 92 5/8 after it said it is beefing up its office productivity business by buying Visio Corp. in a stock swap worth $1.3 billion. Oracle Corp. (ORCL) dipped 2 3/4 to 42 11/16 after meeting analysts' estimates in its first quarter Tuesday. Sun Microsystems Inc. (SUNW) closed off 3 to 82 3/8.

Among widely held Internet offerings, Yahoo! Inc. (YHOO) lost 2 13/16 to 162 3/8; America Online Inc. (AOL) dropped 2 to 89; Lycos Inc. (LCOS) shaved off 5/16 to 43 3/4 and Amazon.com Inc. (AMZN) ended off 7/16 to 65 9/16.