MARKET CLOSE: Late swoon takes techs down

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A late selloff drove the overall technology sector lower Tuesday.

After spending most of the afternoon in positive territory, the tech-heavy Nasdaq Composite Index fell sharply in the final hour of regular trading to end at 3,455.22, down 113.68 for the session. The S&P 500 fell 9.87 to 1,426.36. The Dow Jones Industrial Average hung onto a gain of 19.61 to close at 10,719.74.

Inter@ctive Week's @100 Index dropped 81.97 to 3,807.16.

Intel (Nasdaq: INTC) gained 0.1875 to 40.3125 as the most heavily traded stock on U.S. markets. The Semiconductor Industry Association's latest monthly reported shows strong August sales for the chip industry.

However, leading chip manufacturing equipment vendor Applied Materials (Nasdaq: AMAT) slid 5.0625 to 51.625 following a downgrade from Wit Soundview. Also downgraded were Brooks Automation (Nasdaq: BRKS), falling 3.5 to 26.375; Nanometrics (Nasdaq: NANO), down 7.625 to 42.375; and Semitool (Nasdaq: SMTL), losing 1.8125 to 11.5.

Cisco Systems (Nasdaq: CSCO), up 0.5 to 56 as the second-most active issue, will hire 2,500 people over the next 3 to 5 years and spend over a $100 million on new capital and interior improvements, the company said today at the opening of a new optical plant in New Hampshire.

Exceeding third quarter installation goals didn't help DSL provider Covad Communications (Nasdaq: COVD). After rising briefly on news that the company has now installed more than 200,000 lines, shares of Covad ended Tuesday's regular trading down 2.09375 to 9.90625.

Corel Corp. (Nasdaq: CORL) was a bright spot on the Nasdaq, bolting up 2.09375 to 5.78125 Tuesday after news Microsoft Corp. (Nasdaq: MSFT) will invest $135 million in the company. The former arch rivals will also work together on Microsoft's new .NET initiative.

Xerox (NYSE: XRX) was down 3.9375 to 11.375 after the company warned it expected a third-quarter loss instead of a profit.

Primus (Nasdaq: PKSI), down 6.125 to 4.75, warned its third quarter results would miss expectations; it also announced a new CFO.

DSET Corp. (Nasdaq: DSET), down 14.09375 to 5.78125, or 70 percent, said Tuesday it would miss third quarter estimates after one of its customers went bankrupt.

Online ad network DoubleClick Inc. (Nasdaq: DCLK), down 3.4375 to 26.1875, has agreed to purchase NetCreations (Nasdaq: NTCR), down 0.875 to 10.5, in a deal worth $191 million.

Netcentives Inc. (Nasdaq: NCNT) was up 1.9375 to 10.9375, after Credit Suisse First Boston reiterated a "strong buy" rating on the Web-based marketing firm. The company also announced a deal with AOL (NYSE: AOL), up 0.1 to 55.35.