Anatomy of a Mark-Up: How Big Traders Toyed With Techs as July Ended

Mutual-fund machinations have long made the last day of a quarter a volatile time in the stock market. In a practice known as "window dressing" -- which no fund manager will admit to -- the losers in a portfolio are sold off, while the stocks that have performed well over the past three months get loaded up on. This makes a fund's end-of-quarter statement more pleasing to the eye.

Even more unscrupulously, some mutual-fund managers "mark up" stocks at the end of the quarter, driving selected issues higher with a flurry of buying in the closing minutes of trade to improve their quarterly statements. It's a ridiculous sort of game, because the price moves up are completely artificial -- most of the time, the stocks will come back down the next day. But ridiculous though the game may be, it looks like hedge funds have started playing.

Such funds, private investment vehicles that cater to high-net-worth individuals, post their returns on a monthly basis. And that seems to be a clue to the moves in some big tech stocks in the final minutes of trading Monday, July 31.

A number of stocks, including more than half of the 24 components in TheStreet.com Internet Sector index, or the DOT, spiked higher just ahead of the closing bell. Among them, Lycos (LCOS Quote) added 2.3% in the last half-hour of trading, Ariba (ARBA Quote) tacked on 1.5%, and BroadVision (BVSN Quote) skipped up 3.4%. The DOT itself rose 1.3% in those last 30 minutes. ...