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IBM

(IBM)

was up 1.8% by early afternoon, reversing a morning slide on earnings fears after analysts at

Merrill Lynch

and

Sanford C. Bernstein

reiterated outperform ratings. Merrill's Tom Kraemer cut his third-quarter earnings estimate by 1 cent and raised his fourth-quarter forecast the same amount, calling the move "fine-tuning." Kraemer said he still expects most IBM business lines to improve quarter over quarter and year over year. Big Blue's earnings are due out Oct. 17.