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Wednesday's early-day market swoon, triggered by the de facto devaluation of the Brazil's real and the resignation of its central bank chief, Gustavo Franco, seemed to concern technology fund managers more than their international fund counterparts.

Two international fund managers said the Brazilian turmoil would, once again, shake confidence in emerging markets, though both believe the Brazilian economy is strong enough to weather the storm. The managers are invested mostly in Europe and said they are standing pat.

But one tech fund manager said early in the day he was putting some transactions on hold, and another said he was not trading at all. Though Brazil has little direct impact on technology stocks, the sector's stratospheric valuations make it vulnerable to uncertainty of any type.

"Brazil's devaluation -- like Mexico's four or five years ago -- will probably cause a short-term panic," said Robert Friedman, chief investment officer of

Franklin's Mutual Series

funds, which has $25 billion in assets invested globally.

"This will certainly reinstate a fear of emerging markets," he said Wednesday morning before the

Dow Jones Industrial Average

had recovered much of its 200-point loss.

But Brazil is no Russia, he said. "Brazil is a real economy, with curbed inflation, and good long-term growth prospects." And while global companies "will have to suffer on devaluation fears," he says, "they are certainly not going to leave Brazil the way they may leave (temporarily) Russia."

Still, the Mutual Series funds have very little exposure to Brazil right now. "We own some of the Telebras spin-offs, but that's all," Friedman said.

"I'm playing it safe and avoiding the emerging markets for the time being," said Thomas Mengel, manager of the $1.3 billion


United International Growth fund and the $100 million


Waddell & Reed International Growth fund.

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Mengel has most of his funds' assets in Europe. " I'm still long-term positive on Europe but trying not to concentrate on big European companies with Latin American exposure.

"It looks very likely that the real will have to weaken further," Mengel added. "Right now, Brazil has a credibility problem. There is a huge fiscal deficit, and a huge current account deficit, and at the moment it looks like it will actually worsen for the short term due to rising interest rates. The country's widening recession means fewer tax revenues and slower growth."

Brazil's ills will have only a moderate impact on the U.S. economy, he said, since only 3% of exports go to Brazil.

Companies to watch for evidence of the impact, he says, are multinationals like


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and the money-center banks like


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On the tech side, Paul Cook, manager of the $81.3 million

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Munder Netnet, was standing pat.

He was in the middle of an interview with


early Wednesday when his pager went off. The trading desk was calling, and wanted to know what to do. Cook had called in some trades the night before, and with the


sinking on the open, his traders wanted to know if he still wanted them to go through.

Hold off, he told them. Let's see how this thing plays itself out. He declined to say which trades he had cancelled.

What does Brazil have to do with the Internet?

"Not a lot," Cook says. But Internet stocks have high price-earnings ratios, and high P/Es mean big swings.

"When you get good news, like low inflation and good interest rates, high-P/E stocks do well," Cook says. "And when you have a macro event like devaluation, or in this case, resignation, these stocks are going to get hit."

After the Internet stocks' high ride in 1998 and the first week of 1999 -- Cook's fund was up more than 10% last week alone -- a lot of people were expecting to see some downside in the sector. Cook said he wasn't selling today. Rather, he wanted to see if a market drop would signal another buying opportunity.

"We're kind of waiting on the sidelines to see what the extent of this is," Cook says. "My guess is that in the next day or two, we will have a better idea of the breadth and scope of things to come. And

then we'll see if it makes sense, to buy into the downturn."

But he might have already missed his chance. By midday, the Nasdaq had recovered all of its losses and was in positive territory. The

Dow Jones Industrial Average


S&P 500

were still underwater, but climbing back up from their lows of early morning.

Abel Garcia, manager of the $20.3 million


Waddell & Reed Science and Technology fund, also took a wait-and-see attitude.

"I wasn't transacting today," Garcia said at midday. Earlier this week, he trimmed his

America Online


at $160 and his



when it passed $400. And he says he only did that because the stocks were starting to take up too much room in his portfolio, bloated by their huge 1998 returns.

While he expects Internet stocks to remain volatile over the next two months, he also thinks they'll continue to climb, based on higher-than-expected earnings and surprising growth rates. And in 1999, he says, more buying will be spurred by growth managers who have stayed shy so far but need to compete.

"This year, growth mangers who don't own some of these Internet stocks are going to pony up," he says, "because they're going to become like people who used to own Coke and

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, the steady growers."

"The metrics are going to surprise people on the upside," Garcia says. "But things out of the blue, like this Brazil thing, will always have this kind of effect."