Investors went shopping for Internet stocks today. But they weren't buying much Amazon.com (AMZN) - Get Report, which suffered from ongoing concern over when the premier online retailer would turn a profit.
Amazon closed down 4 15/16, or 6.5%, at 71, though that was far from the session low of 65 7/8. Following its third-quarter
results Wednesday night, Amazon was
downgraded by three research firms,
CIBC World Markets
, all of which expressed disappointment that Amazon was not making enough progress toward earning a profit.
The company indicated that marketing expenses would rise to roughly $100 million in the fourth quarter vs. around $33 million in the third quarter. Both
James Cramer and
Herb Greenberg took shots at Amazon in earlier columns.
Not all the research was negative.
Donaldson Lufkin & Jenrette
reiterated a top pick rating and a 6- to 12-month target price of 140, while also stating the stock should be a core Internet holding. "In our view it's crazy to get off this train heading into the holiday shopping season," wrote analyst Jamie Kiggen. "Do you really want to bet against Amazon as they make a massive bet on Q4? We don't. And more evidence of Amazon's model should become apparent as year 2000 unfolds."
While shock waves from Amazon's woes reverberated through the Internet sector, they did not lead to a sharp selloff in Net stocks. Positive economic
news that led the
Dow Jones Industrial Average
to a 227-point gain and the
Nasdaq Composite Index
to a 72-point gain also supported Net stocks.
TheStreet.com Internet Sector
index closed up 13.33, or 1.9%, at 719.82.
Not all the post-earnings news was disappointing.
closed up 8 1/4, or 8.8%, at 102 1/4 after besting earnings estimates this morning. Third-quarter earnings of 21 cents were better than market estimates of an 18-cent gain. Network Solutions said it registered a record 1.3 million new domain names in the quarter, up 160% from the 507,000 registered in the third quarter of 1998 and up 12% from the 1.2 million registered in the second quarter of this year.
Among other winners,
closed up 8 5/16, or 20%, at 49 13/16 after the online digital music provider said it would do cross-promotional work with
to increase traffic between the two sites.
closed up 2 3/4, or 2.3%, at 122 3/8. Shareholders voted to approve a proposal to expand the number of common shares outstanding to 6 billion amid investor demand for the company to split its stock for the seventh time.
closed up 7 1/16, or 25%, at 35 9/16. The company publicized that it ranked 15th among shopping Web sites in the latest
survey and was ranked one of the top 10 of the 50 fastest-growing Internet companies by
. Though uBid did improve from 19th to 15th in the Media Metrix rankings for September (excluding the AOL
), its reach actually fell to 2 million unique visitors in September versus 2.3 million in August and 2.5 million in July, according to Media Metrix.