Net Stocks End in the Green Despite IBM's Tumble

Old technology gave way to new technology today.

IBM's (IBM) tumble after its earnings warning turned into an opportunity for new technology like the Internet.

TheStreet.com Internet Sector index ended up 9.44, or 1.3%, at 718.96. Net investors determined that IBM's fears about Y2K were not much of a concern for them, and the sector pushed higher after some early weakness. And earnings actually were a positive for the Internet sector, led by boisterous returns from America Online (AOL). AOL finished the day up 4, or 3%, at 122.

Net/Tech Indices INDEX CHANGE % VALUE TSC Internet 9.44 +1.3% 718.96 TSC E-Commerce 1.31 -1.3% 101.38 TSC E-Finance 23/32 -1.3% 55 25/32 Nasdaq 13.82 +0.5% 2801.95

John Murphy, president of murphymorris.com, which provides technical analysis, said that the DOT remains in an uptrend, holding above the 200-day moving average around 600. To remain positive, it would need to stay above the Oct. 18 low of 651.08, he said, but it still needs to climb above the recent high of 746.99 from Oct. 11 to resume the uptrend.

Several other companies ran up in advance of their earnings. CNet (CNET) closed up 3 1/16, or 6%, at 53 9/16. After the close, it reported a loss of 32 cents a share, a penny better than the First Call/Thomson Financial estimate, but far worse than the 2-cent profit from a year ago. The company has embarked on a marketing effort that impacted the bottom line.

Also, Inktomi (INKT) closed up 4 13/16, or 4%, at 120 1/2. It reported a loss of 9 cents for its fiscal fourth quarter, compared with an 18-cent loss for the year-ago period and a penny better than the consensus estimate. Revenue of $26.2 million was an improvement over the $19.6 million in revenue from the fiscal third quarter.

Exodus Communications (EXDS), closed up 6 5/16, or 9%, at 73 1/2. It reported a 29-cent loss for its third quarter before charges, in line with the First Call estimate.

Phone.com (PHCM) added an astounding 18 9/16, or 8%, to 248 9/16 ahead of its earnings report. It reported a loss of 16 cents in its fiscal first quarter vs. the 71-cent loss in the first quarter of last year and much better than the 23-cent loss estimate from First Call. Phone.com has gained about 50 points since Monday, when it announced a 2-for-1 stock split.

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