Despite Few Y2K Woes So Far, Net Sector Suffers Selloff

Plus, eToys hits a new low in an ailing e-commerce environment.
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For a country that waits until the last minute to buy Christmas gifts and to file taxes, a pre-New Year's Day selloff in the Internet sector wouldn't be too surprising.

Despite reports that Y2K problems were in check in those countries already celebrating the millennium, Internet stocks were mostly lower as investors decided to bail amid uncertainty about what would go on as the day unfolds.

TheStreet.com Internet Sector

index was down 15.97, or 1.4%, at 1144.47 in early trading. If the selling persists, it has some potential to snowball in a holiday-shortened session. The cautious sentiment comes amid reports of no Y2K-related woes in New Zealand, which is well into its 2000 celebration. Russia will remain a focus, particularly with President

Boris Yeltsin

resigning today and ongoing concern that Russia would be one of the most prone of the major superpowers to suffer from Y2K-related problems.

A little news was coming out of the Internet sector, but nothing major.

Talk City

(TCTY)

said late yesterday that it would acquire

Research Connections

, a provider of online market research. Talk City, which runs chat rooms and develops online communities for Internet companies, did not disclose the price it paid for the company. Its stock shot up Thursday after a

mention in

Business Week's

Inside Wall Street column. Talk City was up 2 1/2, or 10%, at 27 in early trading today.

E-commerce plays continued to flounder.

eBay

(EBAY) - Get Report

was off 2 7/16, or 2%, at 132 1/2. Its session low of 129 3/16 marked the first time since Nov. 4 that the stock had traded below 130. Technicals were also deteriorating, with lows of 126 1/4 from Nov. 3 and 124 1/2 from Oct. 18 within sight.

eToys

(ETYS)

was in uncharted territory. It was off 9/16, or 2.2%, at an all-time low of 25. And

Amazon.com

(AMZN) - Get Report

also was on the defensive, dropping 1 3/16, or 1.5%, at 77 7/8.