MARKET CLOSE: Dow, Nasdaq stage late rally but still finish lower

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U.S. stocks rallied back from a miserable start Wednesday but still finished in the red. The Dow plunged more than 400 points in early trading before closing off 115 points to 9,975.02. The Nasdaq shed 43 points to close at 3,171.40.

"I think that we had a momentary panicky situation. For about an hour, the sellers were in control," said Bill Barker, investment strategy consultant for Dain Rauscher. "But there's a lot of cash out there and people continue to buy on market weakness without fear."

IBM (NYSE: IBM) plunged $17.50 to $95.50 after it was downgraded on slowing sales figures following its latest earnings report.

Intel (INTC) gained $2 to $38.19 after topping analysts' reduced estimates in its latest quarter. Advanced Micro Devices (AMD) trimmed 25 cents to $18.13.

Among widely held PC stocks, Dell (DELL) added $1.88 to $26.25; Compaq (CPQ) rose $1.45 to $25.20; Gateway (GTW) inched up 23 cents to $50.05 and Apple Computer (AAPL) closed unchanged at $20.13.

PeopleSoft (PSFT) rallied up $8.44 to $41.19 after it reported a strong third quarter, announced a repurchase plan and a new CFO and got some upgrades.

Disappointing fourth-quarter guidance outweighed RealNetworks' (Nasdaq: RNWK) satisfying third-quarter results as its shares fell $6.81 to $14.88.

Sun Microsystems (SUNW) gained fell $1.19 to $110.19 after it inadvertently released solid sales and earnings in its first quarter. Oracle (ORCL) trimmed 13 cents to $33.56 and Microsoft (MSFT) gained $1.31 to $51.75.

Storage firm EMC Corp. (NYSE: EMC) shed $4.94 to $90 after it topped analysts' estimates by a penny for the third quarter as revenue grew 34 percent compared to a year ago.

Yahoo! (YHOO) added $3.81 to $52.75 while America Online (AOL) and Amazon.com (AMZN) rose $3.31 and $3.19 a share, respectively. Lycos (LCOS) shed $1.63 to $37 and eBay (EBAY) picked up 63 cents to $53.38.