After Two-Day Slip, Net Sector Regains Strength

Internet stocks return to solid ground with a boost from CMGI earnings.
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Most everything in the Internet sector happens quickly, so its market correction lasted for just about two sessions. Net stocks were back on solid ground today.

TheStreet.com Internet Sector

index was up 25.50, or 2.3%, at 1120.40 in recent trading. The DOT traded as high as 1129.73 this morning, seeing resistance right around the Dec. 10 close of 1129.50.

Certainly helping to right the ship was

CMGI

(CMGI)

after its stellar earnings

report last night and its announced stock split. It was up 31 7/8, or 16%, at 231 5/8. After seeing the numbers,

Dain Rauscher Wessels

raised its price target on CMGI to 250 from 120.

CMGI posted a first-quarter loss of $1.08 a share, smaller than the

First Call/Thomson Financial

estimate of a $1.76 loss, but down from the year-ago profit of 38 cents a share. Revenue jumped to $123.7 million in the latest quarter, from $37.4 million a year ago.

Moving hand in hand with CMGI was

Internet Capital Group

(ICGE)

. The Internet incubator was up 8 3/8, or 7.5%, at 116 1/2. Internet Capital Group yesterday said it sold 6 million shares in a public offering at $108 a share. The company also said that it had agreed to sell $50 million in common stock to

Ford Motor

(F) - Get Report

in a private placement, also at a price of $108 a share. The company said it intends to explore a variety of potential strategic relationships with Ford.

Elsewhere,

priceline.com

(PCLN)

was up 3 3/4, or 7%, at 59 after the company spoke with analysts yesterday.

Warburg Dillion Read

analyst Sara Zeilstra wrote that the discussion was very upbeat and a feared "worst-case scenario" has not materialized.

Zeilstra wrote that priceline management had previously

guided for flat sequential revenue in the quarter on the assumptions that available inventory would be limited during the holiday season and in December customers would avoid buying tickets due to Y2K fears. But Zeilstra indicated that priceline's business "appears to be stronger than ever, with inventory available and demand continuing to grow."

Zeilstra maintained a strong buy rating and a 125 price target on priceline. She noted that, for the fourth quarter, projected revenue of $152 million and a per-share loss of 8 cents were based on ticket sales of 620,000. However, she indicated ticket sales could approach or surpass 650,000, which would bring revenue closer to $160 million. While extra revenue would likely be directed to sales and marketing, depending on the upside, priceline could beat her loss-per-share estimate by a penny or so, she wrote.

America Online

(AOL)

was benefiting from official

word that it would team with

Wal-Mart

(WMT) - Get Report

on a co-branded Internet service provider along with numerous cross-marketing initiatives. AOL was up 1 7/8, or 2%, at 91 1/2.

barnesandnoble.com

(BNBN)

was up 5/16, or 1.8%, at 17 7/16. The company said it was acquiring an equity stake of up to 40% in

Enews.com

, an online retailer of magazine subscriptions. barnesandnoble.com will acquire approximately 32% of Enews.com for cash and stock, with warrants that would increase the holding to approximately 40%. barnesandnoble.com said this was the first of several investments it plans to make in the coming months designed to expand its product offerings in areas related to its core business.

Also benefiting from a stock split was

InterNAP Network Services

(INAP) - Get Report

The Internet service provider said it will split its stock 2 for 1 Jan. 7 for all shareholders of record on Dec. 27. The company went public in September. InterNAP was up 10, or 7%, at 152.