After Popping, Net Sector Dropping

Light volume and yo-yo trading show edginess ahead of Fed meeting. Also, a rude awakening for Napster.

Author:: David Shabelman
Publish date:: May 9, 2000 11:59 AM EDT

Traders appeared to be taking advantage of an early pop in technology stocks to sell.

The

Nasdaq

was down 71, or 2%, to 3599 in recent trading after moving as high as 3708.74 soon after the opening. Internet stocks were following the rest of tech.

TheStreet.com Internet Sector

index was down 17, or 2%, at 848 after trading as high as 883.19 early on. The market was expected to have a negative bias heading into the

Federal Reserve's

policy meeting a week from today, with light volume contributing to volatile back-and-forth trading.

Among Internet stocks,

Akamai Technologies

(AKAM) - Get Report

was down 3 9/16, or 4%, at 83 1/16, though it had traded as high as 91 3/8. The company said that it had aligned with

EncodeThis!

, a provider of encoding and digital media solutions, to offer advanced encoding and streaming media solutions for the high-quality delivery of digital media. Under terms of the agreement, EncodeThis! will become a provider of encoding services to Akamai. This will enable Akamai to continue to expand its end-to-end solution for the distribution of streaming media over the Internet. In turn, EncodeThis! will offer its customers Akamai's media delivery services.

BroadVision

(BVSN) - Get Report

was down 1 27/32, or 4%, at 44 15/32. The marketing software company was teaming with

Deloitte Consulting

and Britain's

WPP Group PLC

(WPPGY)

on a venture to help companies build their e-business capabilities. The venture, called Roundarch, has 150 employees and projected revenue of more than $100 million.

Among other early movers,

Kana Communications

(KANA)

was down 4 29/32, or 9.3%, to 47 25/32;

Lycos

(LCOS)

was up 5/16, or 1%, to 48 5/16, though it traded as high as 52; while

eBay's

(EBAY) - Get Report

slide continued, down 7 19/32, or 6%, to 120 29/32.

Also,

EarthLink

(ELNK)

was up 1 1/4, or 7%, at 18 1/4 after

Sprint

(FON)

said it would increase its stake in the Internet Service Provider to 26.7%. Sprint will invest $431 million through the purchase of 26 million shares. Sprint previously held a 15% stake in EarthLink.

The Wall Street Journal

reported that a federal judge ruled against Internet music service

Napster

in two key legal areas, setting the stage for a possible shutdown of the site. Napster, which allows users to share MP3 music files on their computers as well as download songs, has been sued by both the

Record Industry Association of America

and heavy metal band

Metallica

, both of which accuse the service of pirating copyrighted versions of music. The latest ruling suggests the recording industry is gaining ground in its fight against Napster.