Stocks ended a volatile session -- talk about one of the biggest understatements of the year -- suffering only a modest amount of damage and well off their earlier breathtaking lows on heavy volume.

The

Nasdaq Composite Index

fell 3.43, or 0.2%, to 2317.32. The tech-heavy Nasdaq Comp had fallen as much as 114.56 at its low, or 4.9%. It had climbed solidly higher in the afternoon before easing back into the red.

The

Dow Jones Industrial Average

fell 125.12, or 1.3%, to 9349.56. At its low, the Dow was down roughly 262 points.

The

S&P 500

fell 5.11, or 0.4%, to 1234.40. At its bottom, the S&P 500 had fallen about 2.7% from yesterday's close. The S&P 500, like the Nasdaq Comp, also managed to log a little time above water.

The

Russell 2000

fell 2.50, or 0.6%, to 424.86.

TheStreet.com Internet Sector

index tumbled 35.73, or 6.6%, to 506.34.

Today's selloff came in response to the de facto devaluation of Brazil's currency, the real, and the resignation of Brazil's central bank president. The Brazilian Bovespa stock index closed down 5.1%.

The stock market's rally off the bottom was attributed in large part to bargain hunters.

On the

New York Stock Exchange

, decliners beat advancers 2,090 to 1,021 on 935 million shares. On the

Nasdaq Stock Market

losers beat winners 2,503 to 1,629 on 1.2 billion shares.

On the NYSE, 73 issues set new 52-week lows while 20 touched new highs. On the Nasdaq, 69 issues set new highs while new lows totaled 50.

On the Big Board,

America Online

(AOL)

was most active, with 25.4 million shares changing hands. It was down 7 3/8 to 146 1/4.

On the Nasdaq,

Ascend

(ASND) - Get Report

was most active, with 34.6 million shares changing hands. It rose 5 7/16, or 7.3%, to 80 5/16.

Market data above are preliminary. Updated numbers and analysis will follow in the Market Roundup

.

2:53 p.m.: S&P Joins Nasdaq in Plus Column

In what at one point looked like it would be a day of stunning losses, the

Nasdaq Composite Index

and the

S&P 500

staged a dramatic comeback, erasing huge losses earlier on and have surged into positive territory.

Meanwhile, the

Dow Jones Industrial Average

and the

Russell 2000

were still lower, but well off their session lows, paring the huge losses they suffered earlier in the session.

The Nasdaq Comp was lately up 28 to 2349. The S&P 500 was up 7 to 1247. The Dow was down 44 to 9431, while the small-cap Russell was down 1 to 426.

TheStreet.com Internet Sector

index was lately down 7 to 535.

The 30-year Treasury bond was lately up 25/32 to 101 26/32, yielding 5.17.

Stocks swooned at the open in the wake of the de facto devaluation of Brazil's currency, the real, and the resignation of its central bank president.

On the

New York Stock Exchange

, decliners were beating advancers 2,005 to 1,018 on 745 million shares. On the

Nasdaq Stock Market

losers were beating winners 2,418 to 1,549 on 942 million shares.

On the NYSE, 19 issues had set new 52-week highs while 72 had touched new lows. On the Nasdaq, 62 issues had set new highs while new lows totaled 47.

On the Big Board,

America Online

(AOL)

was most active, with 21 million shares changing hands. It was down 4 9/16 to 149 3/8.

On the Nasdaq,

Ascend

(ASND) - Get Report

was most active with 31 million shares changing hands. It was up 6 3/16, or 8%, to 81 1/8.

Lucent

(LU)

made it official today and said it is buying Ascend for roughly $20 billion in stock. Lucent was lately down 2 7/8, or 3%, to 104 5/16.

2:00 p.m.: Nasdaq Erases Huge Loss

The

Nasdaq Composite Index

has mounted a dramatic comeback, erasing huge losses suffered early on, and have now risen into positive territory.

The tech-heavy gauge had fallen as much as 114.56 from yesterday's close, or 4.9%, at its bottom. The Nasdaq Comp was lately up 12 to 2333.

The

S&P 500

also rose above water earlier this afternoon, but has since turned negative. At its bottom, the S&P 500 had fallen about 2.7% from yesterday's close. The S&P 500 was lately down 2 to 1238.

Meanwhile, the

Dow Jones Industrial Average

was down 99 to 9376, well off its lows. The small-cap

Russell 2000

was down 2 to 425.

Internet stocks were mostly lower.

TheStreet.com Internet Sector

index was down 1%, well off its worst levels of the session.

Stocks plunged out of the gate after a de facto devaluation of Brazil's currency, the real. Also today, Brazil's central bank president quit. Those events "are a major blow to the credibility of Brazil's economic strategy," said rating agency

Fitch IBCA

.

The Brazilian

Bovespa

stock index was lately down 7%, off its lows.

The bounce in the market was attributed in part to bargain hunters rushing into the market to take advantage of the cheaper prices.

Market internals were decidedly negative.

On the

New York Stock Exchange

, decliners were beating advancers 2,148 to 860 on 638 million shares. On the

Nasdaq Stock Market

losers were beating winners 2,493 to 1,388 on 801 million shares.

On the NYSE, 15 issues had set new 52-week highs while 69 had touched new lows. On the Nasdaq, 51 issues had set new highs while new lows totaled 42.

On the Big Board,

America Online

(AOL)

was most active, with 20 million shares changing hands. It was down 3 5/8 to 150.

On the Nasdaq,

Ascend

(ASND) - Get Report

was most active with 29 million shares changing hands. It was lately up 5 11/16 to 80 5/8.

Lucent

(LU)

made it official today and said it is buying Ascend for roughly $20 billion in stock. Lucent was lately down 3 3/8, or 3%, to 104 1/2.

Sector Focus: Banks

Bank stocks are getting mostly pounded in the wake of the bad news out of Brazil, which has sparked fears about the sector's exposure in the troubled South American country. The

Philadelphia Stock Exchange/KBW Bank Index

was lately down 2.4%.

Notable big banks on the down side, which are in the bank index:

Citigroup

(C) - Get Report

,

J.P. Morgan

(JPM) - Get Report

, and

Chase

(CMB)

. Citigroup was down 3 7/16 to 52 5/16; J.P. Morgan was down 4 5/8 to 107 3/16, while Chase was down 3 5/16 to 70 5/8.

For the year, the bank index is currently up 1.2%, vastly lagging, however, brokerage stocks. For the year, the

American Stock Exchange Broker/Dealer Index

is up a whopping 21.7%. The broker index today, however, is being brutalized. It was down 4.2%.

1:17 p.m.: Midday Musings: Just Can't Stop It: Nasdaq on Plus Side as Losses Narrow

12:04 p.m.: Stocks Bounce from Lows

Stocks staged a rally off the bottom as the market's major averages were lately well off their session lows.

The

Dow Jones Industrial Average

was lately down 173 to 9300. At its bottom, the Dow was down as much as 262 points.

The

S&P 500

was lately down 14 to 1225. The

Nasdaq Composite Index

was down 18 to 2303. The

Russell 2000

was down 5 to 422.

Internet stocks, which were in freefall earlier, snapped back handsomely.

TheStreet.com Internet Sector

was down 14 to 528, well off its low of 457.20.

The stock tumble came in the wake of the move by Brazil's central bank to let the country's currency, the real, trade in a wider band, effectively devaluing the currency. The central bank president also resigned. The Brazilian Bovespa stock index was lately down 7%, well off its lows.

With the Brazilian turmoil, investors sought refuge in the haven of Treasury securities. The 30-year bond was lately up 1 9/32 to 101 21/32, yielding 5.14%.

Sectors that were notable on the downside were bank, brokerage, oil service and forest and paper product issues. The

Philadelphia Stock Exchange/KBW Bank Index

was down 4%. The

American Stock Exchange Broker/Dealer Index

was down 5%. The

Philadelphia Stock Exchange Oil Service Index

was down 5%. The

Philadelphia Stock Exchange Forest & Paper Products Index

was down 4%.

On the

New York Stock Exchange

, decliners were beating advancers 1,710 to 1,655 on 451 million shares. On the

Nasdaq Stock Market

losers were beating winners 2,288 to 2,046 on 556 million shares.

On the NYSE, 10 issues had set new 52-week highs while 63 had touched new lows. On the Nasdaq, 30 issues had set new highs while new lows totaled 36.

On the Big Board,

America Online

(AOL)

was most active, with 16 million shares changing hands. It was down 5 3/8 to 148 1/4.

On the Nasdaq,

Ascend

(ASND) - Get Report

was most active with 24 million shares changing hands. It was lately up 4 7/8 to 79 3/4.

Lucent

(LU)

made it official today and said it is buying Ascend for roughly $20 billion in stock. Lucent was lately down 4 3/16, or 4%, to 103 11/16 .

Tech Focus

Among the major tech-type indices, the

Philadelphia Stock Exchange Computer Box Maker Index

was down 1%, the

Morgan Stanley High-Tech 35

was down fractionally, and the

Nasdaq 100

was down fractionally.

The

Philadelphia Stock Exchange Semiconductor Index

was up 2%.

On the earnings front,

Motorola

(MOT)

and

Apple

(AAPL) - Get Report

are both slated to report earnings today.

After the close yesterday,

Intel

(INTC) - Get Report

and

Yahoo!

(YHOO)

both reported fourth-quarter results, and both beat street expectations. Intel was lately up 2 5/8 to 138 3/8, while Yahoo! was lately down 4 3/8 to 396 5/8.

Motorola is expected to post earnings of 23 cents a share, according to the

First Call

28-analyst consensus estimate, while the 18-analyst consensus projects Apple to earn 70 cents. Check out Tero Kuittenen's recent commentary piece on

Motorola.

11:11 a.m.: Brazil Turmoil Sends Stocks Tumbling

Bad news out of Brazil has sent stocks swooning early on, however, the major market averages are well off their session nadirs.

This morning Brazil's central bank let the country's currency, the real, trade in a wider band, effectively devaluing the currency. The central bank president also resigned. The Brazilian

Bovespa

stock index was lately down 7%. Earlier in the session, the

Sao Paulo Stock Exchange

declared a 30-minute trading halt.

Stocks plunged sharply early on and registered their session lows within the first half-hour of trading before snapping off the bottom.

The

Dow Jones Industrial Average

was lately down 194 to 9281. The Dow had fallen as much as about 262 points. The

S&P 500

was down 19 to 1220. The

Nasdaq Composite Index

was down 40, or 2%, to 2280, well off its lows. At its bottom, it had fallen approximately 115 points. The small-cap

Russell 2000

was down 9 to 419.

Internet stocks were down sharply, but well off their worst levels of the day.

TheStreet.com Internet Sector

index was down 14, or 3%, to 528.

The

Nasdaq Stock Market's

biggest loser so far today is an Internet stock.

Broadcast.com

was lately down 28 13/16 to 195. The stock closed yesterday at 222. Its low today is 145.

In light of the troubles in Brazil, Treasuries were the big winners. The 30-year bond was lately up 1 30/32 to 102 11/32, yielding 5.10%.

As for stocks, Ricky Harrington, senior vice president and technical analyst at

Interstate/Johnson Lane

, said he thinks the "buy on the dip" mentality that has been in place over the last few years is still in place. However, that strategy "won't serve traders and investors well this time." He said the market may be in for as severe a correction -- or maybe more -- than it suffered last summer.

The recent record highs reached by the Dow, S&P 500 and Nasdaq Comp will last for "quite some time," Harrington said.

On the

New York Stock Exchange

, decliners were beating advancers 2,382 to 434 on 293 million shares. On the Nasdaq, losers were beating winners 2,867 to 536 on 351 million shares.

On the NYSE, 2 issues had set new 52-week highs while 58 had touched new lows. On the Nasdaq, 15 issues had set new highs while new lows totaled 28.

On the Big Board,

America Online

(AOL)

was most active, with 12 million shares changing hands. It was down 4 5/8 to 149.

On the Nasdaq,

Cisco

(CSCO) - Get Report

was most active on volume of 14 million. It was lately down 2 to 96 3/16.

9:45 a.m.: Stocks Plummet at the Open

A de facto devaluation of the Brazilian real has sent the stock market reeling with major market gauges off sharply, with the

Nasdaq Composite Index

leading the way down, falling 4.9%, while Treasuries soared.

The Brazilian

Bovespa

stock index was lately down 10.2%, and the exchange has declared a 30-minute trading halt. Also, Brazil's central bank chief quit.

The Nasdaq Comp was down 114 to 2206. The

Dow Jones Industrial Average

was down 132 to 9342. The

S&P 500

was down 23 to 1216.

The small-cap

Russell 2000

was down 14 to 413.

TheStreet.com Internet Sector

was down 67 to 475.

A flight-to-safety bid sent the 30-year Treasury bond up sharply. It was up 2 5/32 to 102 17/32, yielding 5.08%.

Most Up at Open -- NYSE

Donna Karan (DK) - Get Report, up 3/8 to 7 1/2

.

Most Up at Open -- Nasdaq

KeraVision (KERA) , up 2 5/8 to 14

: The

Ophthalmic Devices Panel

of the

Food and Drug Administration

recommended approval -- with conditions -- for the vision correction firm to sell Intacs, to treat nearsightedness.

Most Down at Open -- NYSE

Telebras (TBH) , down 12 1/4 to 50 1/8

.

Most Down at Open -- Nasdaq

Broadcast.com , down 76 to 147

.