Guards Terry Gannon and Sidney Lowe led a late rally by North Carolina State as the Wolfpack upset No. 3 North Carolina, 70-63, in Raleigh yesterday. It was the first time since 1970 that the Tar Heels have lost three straight.

North Carolina (21-6) lost to Villanova on Sunday and Maryland on Wednesday. The Tar Heels still are tied for first place in the Atlantic Coast Conference with Virginia at 8-2. The Wolfpack is 15-8 and 6-4.

State had lost seven in a row to North Carolina, but Coach Jim Valvano was restrained after the game.

"For seven games, I think we lost with a lot of class and humility," he said. "Now that we've won, I told the kids we want to win the same way--with dignity. There's no gloating on our part."

With N.C. State trailing, 56-55, with 5:37 left, Gannon made two three-point field goals and Lowe two foul shots to give their team a 63-56 lead with 4:45 left.

Baskets by Jim Braddock and Sam Perkins cut it to 63-61 before Lowe made the first of two free throws at 1:34. Lowe made two more free throws with 36 seconds left, but North Carolina got two from Matt Doherty 10 seconds later.

Thurl Bailey, who led the Wolfpack with 20 points, missed a free throw with 20 seconds left, but Cozell McQueen got the rebound and was fouled. He made both shots with 17 seconds remaining.

Perkins led UNC with 18 points and Michael Jordan had 17 before fouling out with 5:04 left.