Supply and demand. A simple economic term, with far-reaching consequences for the Internet sector.

As the Net sector became the place to be for investors, lack of supply helped drive prices higher in most issues, while many Net companies that went public also enjoyed marvelous returns. Supply is not a problem anymore, as Internet companies have rushed to cash in on a seemingly endless supply of funds. But some market watchers still think supply will be the one factor that could derail the Internet sector, and that when you see some Internet IPOs that are not well received it could be a sign of impending doom. That's not a problem at the moment.

TheStreet.com Internet Sector

index was up 16.44, or 1.42%, to 1170.99 in afternoon trading.

TheStreet.com New Tech 30 was up 14.17, or 1.8%, to 796.28.

net.Genesis

(NTGX)

, which develops software to analyze the behavior of Web site visitors, was up 39, or 217%, to 57 in its first day of trading. Also, Internet advertising agency

Avenue A

(AVEA)

was up 54 1/2, or 227%, to 78 1/2, while

Niku

(NIKU)

, a Web-based investment technology services automation software firm, was up 43 1/4, or 180%, to 67 1/4.

In addition, indications are for a strong showing from

3Com's

(COMS)

Palm

(PALM)

spinoff, which is set to go public later this week. Underwriters doubled its price range to $30-$32 from $14-$16 yesterday. 3Com was up 12 11/16, or 16%, to 91 3/4.

When will there be too much supply?

"There's always that point of saturation. At some point everything changes," said Randall Roth, analyst with the

Renaissance Capital IPO Fund

, which is up a nice 30% this year. "But we've only scratched the surface of what the technology can do and as long as these companies keep coming out and blowing up the charts, there are going to continue to be IPOs."

And while Roth said he did not anticipate supply problems, he did say there could be a dropoff should technology fall out of favor and/or the Net companies that have been bid up do not deliver the profits that their valuations call for. And while first-day returns of some IPOs can be mind-boggling, Roth said aftermarket performance of some IPOs has shown "a hint of uneasiness."

"It's frothy, but that doesn't necessarily mean it's not healthy," he said. "In terms of the deals that are getting done, it's definitely healthy. But it feels kind of edgy."

Elsewhere, online brokerages were soaring after

National Discount Brokers

(NDB)

said that it expected to "substantially exceed analysts' projections" for its current quarter. NDB said it will report earnings in the range of 95 cents to $1.05 on estimated revenue of $125 million to $135 million for the third fiscal quarter of 2000, which ends today. That compares to the two-analyst estimate of 8 cents from

First Call

. It was up 9 1/4, or 30%, to 40 1/4.

TheStreet.com E-Finance

index was up a sharp 4 21/32, or 6.5%, to 76 5/16. Among other online brokerages,

DLJdirect

(DIR)

was up 13/16, or 9%, to 10 3/8. The company said it agreed to an Asian Internet venture with

Hutchinson Whampoa

. Also,

E*Trade

(EGRP)

was up 1 13/16 ,or 7.9%, to 24 11/16.

Charles Schwab

(SCH)

was up 3 3/16, or 8.5%, to 40 1/2; and

Ameritrade

(AMTD) - Get Report

was up 1 3/8, or 8.5%, to 17 1/2.

Finally,

24/7 Media

(TFSM)

was down 3 5/16, or 6.7%, to 46 3/16 after it said it would acquire

Exactis.com

(XACT)

in a $490 million stock swap. 24/7 Media said it will issue 0.60 share for each share of Exactis.com, a provider of permission-based precision e-mail marketing and communications outsourcing solutions. Exactis was up 7 11/16, or 41%, to 26 3/8.

TSC's

George Mannes was all over the potential for consolidation in the online direct-mail business in a

piece that ran earlier this month.