Online Brokerage Houses Right On Today

Yahoo! (YHOO Quote) and eBay (EBAY Quote) are out. Ameritrade (AMTD Quote) and E*Trade (EGRP Quote) are in.

That's an oversimplification of what occurred today and, in light of recent gains, it would be a stretch to say that Yahoo! and eBay are out of favor with investors. Rather, there may have been some asset reallocation within the Internet sector today and online brokerage houses were hot, while some of the other "blue-chip" Internet stocks were not.

"People are saying that a $20 billion, $30 billion and $40 billion market cap for some of these stocks is too much and they're looking for younger and fresher companies that have a greater chance for appreciation," says Dan Mathisson, head trader for D.E. Shaw Securities. "People are wondering how much upside there is in these companies and how much more upside is in other companies."

Ameritrade soared more than 30%, closing 24 3/4 higher at 105. E*Trade closed 7 1/4 higher at 62 7/16 in its first day of trading after it split 2-for-1. National Discount Brokers (NDB Quote) also added 30%, closing 5 7/8 higher at 24 7/8. Yahoo! closed down 18 11/16 at 335 9/16, while eBay closed down 15 5/8 at 262.

Online brokerage accounts received favorable press last week after Credit Suisse First Boston reported that online trading averaged 340,000 trades a day. Today, The New York Times focused on the brokerage houses, reporting that lesser-known online brokerage firms are helping to shape the business of buying and selling of stocks as much as the larger big-name firms.

Ameritrade CEO Joe Ricketts told Reuters today that the company would be doubling its workforce over the next 12 to 18 months to account for growth in trading volume. Online brokerage houses have been criticized for being unable to fill orders and for crashing due to high volumes.

Secondary brokerage stocks also benefited. Siebert Financial Group (SIEB Quote) closed up 6 13/16 or 55 %, at 19 1/8. And JB Oxford Holdings (JBOH Quote), a clearing house and brokerage firm that was the subject of much message board chatter, was up more than 100%.

Ellison Speaks, Is the Government Listening?

Investors at the NationsBanc Montgomery Securities Technology Conference in San Francisco were eager to hear keynote and luncheon speaker Oracle (ORCL Quote) CEO Larry Ellison. A year ago, Ellison spoke at lunch when Oracle stocks were in the dumps, trading around $18 per share. Ellison showed up and promised 25% database sales growth. In the subsequent year, he delivered 33% database sales growth. Today, he predicted Oracle would continue to dominate its field and said, regarding Microsoft: "I can't wait to get the government investigating us," he said, "That's my job."

Oracle closed today up 3 3/4 at 59 1/8 after reaching an all-time high of 60 3/8 earlier in the day. The company announced a 3-for-2 stock split this morning.

-- Cory Johnson