Wall Street: Wednesday close

LATE selling kicked in as investors had second thoughts about how soon and how strong the profit re-bound will be.

The Dow Jones Industrial Average, which had lost 110 points in the prior two days after a 24% run-up from September lows, erased an early 100-point advance to close down 56.46 points or 0.56% to 10,094.09. The Nasdaq Index climbed to its highest level since July before finishing the day off 10.85 points or 0.53% at 2,044.89.

Bill Schneider, head of cash trading at UBS Warbug, said the markets may have gotten ahead of themselves. 'A lot of cash was put to work in the morning and the buy-the-dip mentality is still very much apparent,' he said. 'But concerns over economic fundamentals and the timing of a turn around continue to linger.'

Art Cashin, market analyst at UBS PaineWebber, said the early rally was more due to investors playing catch up rather than anything based on fundamentals. 'I think some active fund managers got caught behind the wave and are now putting their money to work,' he said.

Positive comments from some tech companies fed into the early optimism, but that too dissipated in the late sell-off. Network equipment maker Cisco Systems rose after chief executive John Chambers struck a cautiously optimistic tone in remarks at a tech seminar, but its shares finished the day down slightly at $20.85

Oracle, number two in software to Microsoft, was among the few names to end the day with much of its gains intact. Oracle gained 98 cents or 6.2% to $16.73 after its chief financial officer said the company would meet profit expectations. Microsoft lost 67 cents or 1% to $68.71. Hewlett-Packard, which has been weak in the face of opposition to its proposed merger with Compaq, added 68 cents or 3% to $23.46 after chief executive Carly Fiorina talked up the combination at a tech gathering.

Merrill Lynch, the broker which uses a bull as its logo, rallied $1.55 or 2.8% to $57.99 after it said it would take a charge of $1.7bn. to cover the cost of cutting 9000 jobs.

Fuel cell companies received a fleeting boost from a new White House policy endorsing the cells use in motor vehicles. Ballard, the company thought likely to benefit the most from the new policy, rose 99 cents or 2.8% to $35.95, but traded well off its early highs. And rival Plug Power plunged $1.50 or 12.8% to $10.50.

'Smokestack' companies also surrendered their early gains with aluminium maker Alcoa closing down 84 cents or 2.3% to $36.50.

Wal-Mart led a weak retailing group, sliding $1.44 or 2.5% to $56.40.