MARKET CLOSE: Investors resume frantic selling

Blue-chip stocks continued their free fall Wednesday as the Dow Jones industrial average tumbled 234 points to finish at 9,487. The Nasdaq composite closed off 27 points to 1,830.24.

"The earnings news remains weak and there are questions regarding if the Fed, aka the cavalry, will arrive in time to rescue the market," said David Sowerby, market strategist for Loomis Sayles. "Volatility is certainly not going to recede and we need to accept it for what it is, and be opportunistic. It's an exercise in frustration to call the bottom, especially on the Nasdaq."

Investors disappointed by the Federal Reserve Board's half-point cut in short-term interest rates Tuesday were also put off by a surprisingly strong Consumer Price Index report for February.

The CPI, which measures the cost of goods and services paid by U.S. consumers, rose 0.3 percent last month, slightly above the 0.2 percent increase analysts had expected.

DoubleClick (Nasdaq: DCLK) announced that it is overhauling its media business and sloughing off 10 percent of employees in the process. The Internet marketer said the moves will increase efficiency and customer service. The stock fell 50 cents to $10.44.

Yahoo (Nasdaq: YHOO) clipped 19 cents to finish at $13.75, while Amazon.com (Nasdaq: AMZN) and eBay (Nasdaq: EBAY) closed off 25 cents and $3.19 a share, respectively. America Online Time Warner (NYSE: AOL) fell 95 cents to $37.84, and CMGI (Nasdaq: CMGI) slid 13 cents to $2.50.

Citrix Systems (Nasdaq: CTXS) lost $2.13 to $17.69 after announcing it will buy Sequoia Software (Nasdaq: SQSW), up 53 cents to $5.53, in an all-cash transaction valued at $184.6 million, or $5.64 per share. It also confirmed previous financial projections, but said the deal will trim 2001 earnings.

Among widely held PC stocks, Dell (Nasdaq: DELL) inched up 25 cents to $24.69, Compaq (NYSE: CPQ) rose 40 cents to $18.15, Gateway (NYSE: GTW) picked up 9 cents to $15.60 and Apple Computer (Nasdaq: AAPL) finished up 44 cents to $20.13.

Shares of PurchasePro.com (Nasdaq: PPRO) dropped $1.56 to $5.97 after a Prudential Securities analyst cut his rating, citing a low rate of converting registered users into paying customers.

Networking equipment company 3Com (Nasdaq: COMS) lost 22 cents to $6 after it missed previously lowered expectations for its third fiscal quarter Wednesday, posting a net loss of $122.8 million, or 36 cents per share, on sales of $629.6 million.

Cisco Systems (Nasdaq: CSCO) moved up 25 cents to $19.31. Nortel Networks (NYSE: NT) shaved off 50 cents to $16.15, and Lucent Technologies (NYSE: LU) inched up 20 cents to close at $11.40.

ZDII staff and Reuters contributed to this roundup.