CPI Lends a Little Support to Net Stocks

SAN FRANCISCO -- Yet another soft economic report was providing early support in the stock market, though Net stocks were only modestly higher overall.

The consumer price index printed flat, and the core CPI, which excludes food and energy, was up 0.1%, keeping inflation fears at bay. The benign report helped lift TheStreet.com Internet Sector index up 3.41, or 0.5%, at 660.61 in recent trading.

Net/Tech Indices INDEX CHANGE % VALUE TSC Internet 3.41 +0.5% 660.61 TSC E-Commerce 2.07 +1.8% 117.56 TSC E-Finance 17/32 -0.6% 89 1/2 Nasdaq 12.40 +0.4% 2830.50

Among Net stocks, both Inktomi (INKT) and EarthLink Networks (ELNK) were seeing profit-taking despite reporting earnings Wednesday that beat estimates.

Inktomi, which makes Internet search and traffic management software, reported a fiscal third-quarter loss of 10 cents a share, 2 cents better than First Call's estimate. Revenue came in at $19.6 million for the quarter, up 212% over the same period in 1998 and up 34% from its fiscal second quarter. Bear Stearns, which has done underwriting for Inktomi, reiterated a buy rating on the stock and a price target of 150. Analysts said that they believe the stock was unfairly hit after Inktomi filed Monday to offer 3.3 million shares of common stock and said the offering is hardly dilutive on an EPS basis. Inktomi was off 1 1/8, or 1%, at 127 3/4 in recent trading.

Internet service provider EarthLink posted a second-quarter loss of 21 cents a share, better than the 22-cent loss estimate from First Call. Revenue was $78 million, more than double the year-ago level of $37.9 million and up from $68.2 million in the first quarter. The company added 180,000 new members in the quarter, a 23% increase over the first quarter. Nevertheless, EarthLink was down 2 3/4, or 4%, at 61 1/4 in recent trading.

In other Internet news, AltaVista, the Internet search engine that CMGI (CMGI) recently agreed to acquire from Compaq (CPQ), will attempt to transform itself into an Internet portal, according to The Wall Street Journal. AltaVista will offer free Internet access to subscribers willing to provide information about themselves and to view ads. In early trading, CMGI was up 13/16, or 0.7%, at 112 5/8. Compaq was off 3/8, or 1%, at 27 5/8.

Efficient Networks (EFNT), which supplies high-speed DSL customer premises equipment, goes public today. It was priced Wednesday at $15.

>To order reprints of this article, click here: Reprints