Net Sector Fights Back From Morning Slump

Shock waves from IBM's (IBM) earnings warning were beginning to wear off the Internet sector. In fact, some investors were seeing the early losses as a buying opportunity.

TheStreet.com Internet Sector index was recently up 6.07, or 0.9%, at 715.59, bouncing back after reaching a low of 688.01. Price action in America Online (AOL) was certainly helping. AOL was up 4 5/8, or 4%, at 122 5/8 in recent trading following its solid earnings report Wednesday.

Net/Tech Indices INDEX CHANGE % VALUE TSC Internet 6.07 +0.9% 715.59 TSC E-Commerce 1.15 -1.1% 101.54 TSC E-Finance 15/32 -2.0% 55 11/32 Nasdaq 21.65 -0.8% 2766.48

A number of other high-profile companies that report after the close were trading higher, but more often than not, profit-takers have been stepping in after the numbers are reported regardless of their strength.

Inktomi (INKT) was up 5 5/16, or 5%, at 121 in advance of its earnings report after the close today. The company is expected to report a 10-cent loss for its fiscal fourth quarter, according to First Call/Thomson Financial.

Also scheduled to report are CNet (CNET), Exodus Communications (EXDS) and Phone.com (PHCM).

CNet was up 1 3/8, or 3%, at 51 7/8. Previously one of the few Internet companies to post a profit, CNet is expected to report a 33-cent loss after it increased marketing spending plans. Exodus, which is expected to report a 29-cent loss, was up 2 5/8, or 4.0%, at 69 13/16.

Phone.com, which already appeased investors when it announced a 2-for-1 split earlier this week, is expected to report a loss of 23 cents a share. It was up 14 1/4, or 6%, at 244 14. The company also said it had entered into an agreement with eFax.com (EFAX) that will allow Phone.com users to sign up for an eFax phone number so they can send fax services from their wireless phones.

Among other stocks in the news, email service provider Critical Path (CPTH) said that it would buy ISOCOR (ICOR), which also provides email services. Shareholders of ISOCOR will receive 0.4707 share of Critical Path stock for each share of ISOCOR they hold. Critical Path was down 9/16, or 1%, at 49 7/16. ISOCOR was up 7 13/16, or 77%, at 17 15/16.

Also, some Internet software companies are on fire. Vignette (VIGN) was up 33 3/16, or 28%, at 152 1/4 after it reported earnings on Wednesday. It reported a loss of 19 cents a share vs. the 21-cent loss estimate. Banc of America raised its rating on the stock to strong buy from buy. And shares of Interwoven (IWOV) were piggybacking, up 14 3/8, or 30%, at 62 3/4.

Shares of Aware (AWRE) were soaring on news of a deal with Intel (INTC). Intel said it would license Aware's telecommunications technology for use in its future digital-subscriber-line product offerings. Aware was up 13 7/8, or 66%, at 34 3/4.

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