Pulse: eBay, PurchasePro and Juniper Networks Pump Life Into Tech

A modest rebound in the Dow Jones Industrial Average provided a lift to technology stocks late in the day, though the day's price action did little to indicate near-term direction.

The Nasdaq ended the day up 31.80, or 0.82%, at 3897.44, closer to the session high of 3913.87 than the low of 3795.08. The lows came when losses in the Dow topped 200, but it ended with a 101-point loss, allowing tech stocks to rebound. TheStreet.com Internet Sector index ended down 2.37, or 0.3%, at 789.42.

Net/Tech Indices INDEX CHANGE % VALUE TSC Internet 2.37 -0.3% 789.42 TSC E-Commerce 0.23 +0.5% 45.62 TSC E-Finance 9/32 -0.6% 47 9/32 Nasdaq 31.80 +0.8% 3897.44

Among the day's winners, eBay (EBAY Quote) finished up $10.88, or 16.6%, at $76.56 as it held an analysts' day today. Salomon Smith Barney analyst Tim Albright put out a note soon after the meeting, indicating that the company would provide long-term guidance that was consistent with his existing estimates and price target ($112.50).

Albright indicated that eBay's revenue is projected to reach $3 billion by 2005, representing almost a 50% five-year CAGR (compounded annual growth rate). He wrote that the total worldwide market opportunity is estimated at more than $1.6 trillion of second-hand transaction value currently, increasing to $2 trillion in 2005.

But investors were not as enamored of Amazon.com (AMZN Quote), which held an analysts' day yesterday. It closed down $3.25, or 8%, at $37.50 after analysts gave mixed reviews to the meeting (see below).

Best performer in the business-to-business sector was PurchasePro (PPRO Quote), which closed up $11.38, or 18%, at $73.13 after Lehman Brothers upgraded the stock to buy from outperform.. And among infrastructure stocks, Juniper Networks (JNPR Quote) extended yesterday's gains that came after it introduced new products. It closed up $10.13, or 4.8%, at $220.06.

Finally, Excite@Home (ATHM Quote) closed down 81 cents, or 5%, at $15.38. The company said that chairman and CEO George Bell would relinquish his executive role once a suitable replacement is found.

2:20 p.m.: Tech Struggles at Midday

Yesterday's glee was being replaced by more caution, as weakness in the broader market was dragging the technology sector lower.

The Nasdaq was off 14 in recent trading. The Dow Jones Industrial Average was off more than 163 points in recent trading. TheStreet.com Internet Sector index was down 9.

Net/Tech Indices INDEX CHANGE % VALUE TSC Internet 9.7 -1.19% 782.33 TSC E-Commerce 0.62 -1.37% 44.74 TSC E-Finance 0.72 -1.45% 46.88 Nasdaq 12.90 -0.33% 3852.7

Over at RealMoney.com, Todd Harrison, head trader and partner with the Cramer Berkowitz hedge fund, was handling out some sound advice for traders unsure what to do with losing trades. Here's what he had to say.

"I've received a lot of emails asking what to do with holdings from earlier in the year that are under water. There is no blanket response to this, as each of you has a different risk profile and parameters.

I will say, however, that hoping is not a viable investment thesis, and if you feel constrained by your portfolio, it may make sense to take partial losses and free up some trading capital. There are literally thousands of opportunities daily to make money. Don't let those bad investments cost you more than they already have."

Sometimes the best advice can be the most simple advice.

Among the day's casualties, Amazon.com (AMZN Quote) was down 5.8% as investors apparently were not thrilled about what the online retailer said at its analyst meeting yesterday. However, eBay (EBAY Quote), which was holding an analyst day today, was up 9%.

Business-to-business stocks have been among the most volatile with the market going through its recent ups and downs and that continued today. On the decline, E.piphany (EPNY Quote) was off 4%, while on the upside, PurchasePro.com (PPRO Quote) was up 17.9% after it was upgraded by Lehman Brothers (see note below).

Among Internet infrastructure plays, Juniper Networks (JNPR Quote) was building on yesterday's rally following the introduction of some new products. However, Foundry Networks (FDRY Quote) was off 6.1%, as analysts claimed Juniper's new edge routers would compete with products from Foundry.

Finally, in a down market, shares of Net2Phone (NTOP Quote) were up 4%. The stock slid Monday after the company was seen as shifting gears when it announced a new venture to sell Internet phone-system software.

But Bear Stearns came to the defense of Net2Phone today, saying the selloff was unwarranted. Analyst Robert Fagin said the company's creation of Adir "in no way signals the capitulation of the company's services business. In fact, we believe Net2Phone's strategy of licensing its industry-leading IP telephony software is a logical extension of the company's core services business." Bear Stearns has done underwriting for Net2Phone.

11:10 a.m. EDT: Amazon Slips After Analyst Meeting; PurchasePro Jumps

Investors appeared unsure whether yesterday's rally was the start of something bigger, or just another opportunity for shorts to slam the market.

Net/Tech Indices INDEX CHANGE % VALUE TSC Internet 3.75 -0.47% 788.04 TSC E-Commerce 0.22 -0.48% 45.17 TSC E-Finance 0.25 -0.53 % 47.94 Nasdaq 12.7 -0.33% 3852.2

In early trading, the Nasdaq was off 12.7 to 3852.2, not seeing follow-through to yesterday's 180-point rally -- at least not yet. TheStreet.com Internet Sector index was 3.75 lower to 788.04.

Among stocks in the news, America Online (AOL Quote) was off 1.8%. The Wall Street Journal reported that the Federal Trade Commission was questioning some regional telephone companies about whether the proposed merger of AOL and Time Warner (TWX Quote) would threaten plans to deliver AOL service through rivals' high-speed telephone lines. The article says the FTC could make any promises the company makes regarding open access into a legally binding requirement of the settlement.

Sticking to the topic of service providers, Excite@Home (ATHM Quote) was off 5.8% after the company said that George Bell, the chairman and chief executive of the high-speed ISP, will relinquish his executive role once a suitable replacement is found.

Prudential Securities took a positive view on the announcement, saying it "signals further progress in preparing the company for major operational expansion." Analyst Paul Merenbloom wrote that the search for a new chairman was a "point of strength, not a signal of any problem." Prudential has not done underwriting for Excite@Home.

Amazon.com (AMZN Quote) was off 4% following its analyst's meeting yesterday.

Robinson Humphrey analyst Russ Miles was upbeat following his trip to Reno, Nevada, site of Amazon's new distribution center. He wrote that while he still had concerns about the company successfully deploying its model globally, "we do believe that management's confidence allayed fears about whether or not the company will be successful." Miles wrote that investors have a "second chance" to buy Amazon shares at current levels "and realize tremendous returns in the next 12-18 months."

"This company continues to realize enormous top-line growth and, coupling that with a cost structure beginning to demonstrate the power of scale, we have a potentially explosive period coming in the next six quarters," Miles wrote. "If your investment horizon is that long, buy shares now to make sure you don't miss the opportunity if evidence begins to reveal itself sooner than anticipated."

Not quite so bubbly was Deutsche Banc Alex. Brown analyst Jeetil Patel, who maintained a market perform rating on the stock after the meeting. "While we found the analyst meeting quite informative, we remain concerned from a stock perspective into the timing of breakeven earnings, much less profitability, from an investment standpoint," he wrote. "The company did not provide any guidance on the timing of breakeven earnings. However, focus on proving out the economics of the core e-tailing model appears to be increasingly important to management with expense controls (i.e. holding costs stable) and increased order volumes (i.e. scale) representing two key tenets in achieving this objective."

PurchasePro.com (PPRO Quote) was up jumping 12.9% after Lehman Brothers upgraded the stock to buy from outperform and upped its price target to $120 from $70. Analyst Patrick Walravens increased revenue estimates for the current year to $56 million from $49 million and to $184 million in 2001 from $153 million. He indicated the increase came from more digital marketplace sales, at a higher average selling price, and additional advertising revenue.

Walravens also indicated that the stock was "relatively undervalued." He pointed out that, at current levels, the stock was trading at 15 times 2001 revenues compared to an average of 36 times for other comparable stocks. Lehman has not done underwriting for PurchasePro.