Pulse: Holiday Cheer Embraces Tech Stocks Today

Tech stocks finally got their visit from Santa Claus. And although the Fat Red One made it a short trip, it was a memorable one for all the tech indices.

The Philadelphia Stock Exchange Semiconductor Index jumped 9.7%, led by strong showings from communications chipmakers such as Applied Micro Circuits (AMCC Quote), which closed up 21.9%, and Broadcom (BRCM Quote), which was up 21.5% for the day.

Net/Tech Indices INDEX CHANGE % VALUE TSC Internet 35.47 12.51% 319.10 TSC E-Commerce 1.51 10.53% 15.85 TSC E-Finance 1.84 7.29% 27.08 Nasdaq 176.93 7.56% 2517.05

A field of screams for most of the year, TheStreet.com Internet Sector Index became a happy place for the day, rising 12.5% in trading. Before today's session the DOT had lost 75.8% of its value since its March 10 high and dropped 55% between the beginning of November and the end of the session Thursday.

Among the winners: Excite@Home (ATHM Quote) finished the day up $1.88, or 46.9%, to $5. 88. The Wall Street Journal ran a story this morning that AT&T (T Quote) was planning to use some cable networks to pay off the $3.2 billion it could owe Cox Communications (COX Quote) and Comcast (CMCSK Quote) for their shares in the Internet-access company.

RealNetworks (RNWK Quote), which dropped 44% Thursday after preannouncing a wide miss in revenue for the fourth quarter and the coming year, got some of yesterday's loss back today. The streaming media company climbed $2.28, or 41.01%, to $7.84, still light-years from its 52-week high of $88.75.

Portal Yahoo! (YHOO Quote) jumped 15.4%, despite a downgrade from Sands Brothers to buy from strong buy over the crumbling consumer and Internet advertising environments.

There was a downgrade and a revised target price waiting for JDS Uniphase (JDSU Quote) this morning. Wachovia Securities reduced its rating on the optical giant based on increasing competition, the weakening economy and the poor showing of major customer Lucent (LU Quote). JDS and merger partner SDL (SDLI Quote) were among the few tech losers, especially among other optical stocks, many of which posted large gains. JDS dropped more than 26% in value in the week that saw its top customer, Lucent, warn and its own announcement of a delay in the SDL merger.

JDS closed down $2.13, or 4.9%, to $40.94. SDL finished the day down 7.18%.

Other opticals fared a lot better. New Focus on Networks (NUFO Quote) gained 9.7%, after announcing a restructured price in its deal to acquire privately held optics maker JCA Technology. A note from Epoch Partners said New Focus will likely reach profitability by the second quarter of 2001.

Optics maker Avici (AVCI Quote) closed up $5.13, or 25.9%, to $24.94, after announcing that it had a procurement contract with AT&T. UBS Warburg analyst Nikos Theodosopoulos wrote that the deal could be very good for Avici if its routers are used in AT&T's network.

A pat on the head might have helped e-business maker PurchasePro (PPRO Quote). Credit Suisse First Boston analyst Chris Vroom gave a positive review to the company's announced deal with BroadVision (BVSN Quote) and said the stock was undervalued. PurchasePro closed up $4.56, or 36.3%, to $17.13.

2:39 p.m.: Tech Laggards Leading Today

Investors decided not to go home for the holiday weekend empty-handed, so they made a bargain-hunting trip among tech stocks today, lifting share prices depressed by a string of losing sessions.

With seven straight down days depressing prices and tax-loss selling at a comfortable level, some investors decided it was the right time to look for some tech bargains, said Scott Kaplan, partner in JNK Securities.

Net/Tech Indices INDEX CHANGE % VALUE TSC Internet 23.1 +8.15% 306.7 TSC E-Commerce 0.89 +6.21% 15.23 TSC E-Finance 1.09 +4.32% 26.33 Nasdaq 115.3 +4.91% 2454.9

The much-shredded Internet stocks were among those leading the way up. Leading e-tailer Amazon.com (AMZN Quote) was trading up 5.35% in recent trading, eBay (EBAY Quote) was up 18.9% and Yahoo! (YHOO Quote) was rising 11%, despite results from a CBS News/New York Times survey quoted by Reuters that suggested the number of people shopping for holiday gifts online has remained relatively flat over last year.

Internet ad agency DoubleClick (DCLK Quote) was trading up 4.8% after the news broke that its proposed acquisition of e-mail marketer NetCreations (NTCR Quote) was off. DoubleClick's shares have declined 64.9% since the deal was announced Oct. 3.

NetCreations, which announced a better deal from an unidentified new suitor, was trading down slightly 0.5%.

Investors also were picking up some battered but well-known names. Cisco (CSCO Quote), which dropped 29% in the last 10 days, was trading up $2.19, or 5.6%, to $41.06. And Sun Microsystems (SUNW Quote), which has dropped 20% in value over the same period, was trading up $3.82, or 14.1%, to $30.75.

Some of the winners were the same stocks that were most recently unloved. Handheld maker Palm (PALM Quote), which dropped 32.8% yesterday after announcing earnings that beat estimates but not its whisper number, was getting some of it back today, trading up $3.38, or 13.2%, to $29.

Former Palm parent 3Com (COMS Quote), which reported earnings after the close yesterday that beat revised numbers, was up 91 cents, or 8.3%, to $7.78. 3Com's shares have dropped 44.4% over the past month.

Research In Motion (RIMM Quote), maker of the Blackberry handheld, also announced earnings that beat estimates and paid for it with a 12.1% drop Thursday. The stock was up 14.8% in recent trading.

Brocade (BRCD Quote), one of the better names in the prized and pricey storage-stocks stable, announced a 2-for-1 stock split Nov. 29. In the last 10 days, the stock has lost 39.2% of its value, closing yesterday at $136.87.

In trading today at the first day of its split-adjusted price, Brocade was leading other storage stocks up, trading up $15.94, or 23.8%, to $84.75. EMC(EMC Quote) was up 13.6% and Emulex (EMLX Quote) was up 16.1%.

Other richly valued favorites that had lost value recently also were finding new favor. Optical networker Ciena (CIEN Quote), which dropped 48% in the last 10 days, was up $15.94, or 26.6%, to $75.82.