Internet Sector Setback Doesn't Cause Much Concern

Some even went bargain hunting in the drop.
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The setback that the Internet sector saw today is certainly nothing to be concerned about. And investors appeared to take a ho-hum approach to the day's trade, with some even taking advantage of the early setback to buy stocks at a "discount." Internet Sector

index closed down 24.33, or 2.5%, at 949.29. The DOT reached a low of 924.88 before buyers stemmed the tide. Price action in



was typical of much of the sector. Yahoo! has soared over the past two months and was pushing toward its all-time high of 244, but closed down 5 5/8, or 2.5%, at 221 3/16 today.

News that it was splitting its stock 2-for-1 gave

Internet Capital Group


a temporary lift to a high of 191 3/4. But the Internet financier closed down 12 5/16, or 6.8%, at 170 1/8 as the company also said it would offer 6 million split-adjusted shares in a public offering, and sell $250 million in convertible subordinated notes.

Extreme Networks

(EXTR) - Get Report

ended off 24, or 25.5%, at 70 1/4 after

Morgan Stanley Dean Witter

cautioned that the company's fourth quarter could have less upside than previous quarters. Though other research firms came to Extreme's

defense, it showed only a marginal recovery from its session low of 65 and dragged other Internet infrastructure stocks lower as well.

But positive research was behind gains in a couple of other stocks.

Akamai Technologies

(AKAM) - Get Report

closed up 25 1/8, or 13.6%, at 210.

Morgan Stanley Dean Witter

, an underwriter for the Akamai IPO last month, initiated coverage of the stock with an outperform rating and a 225 price target.



closed up 18 3/8, or 31%, at 77 after

Merrill Lynch

said that it considers the stock a "core holding" in an Internet portfolio. Merrill has done underwriting for

Also among the day's winners was


(EBAY) - Get Report

, which closed up 13 1/4, or 8.6%, at 167 9/16. The online auction service said today that it rolled out 10 more regional Web sites: New York, Chicago, Detroit, Phoenix, San Diego, Indianapolis, Columbus, Ohio, Oklahoma City, Okla., Austin, Texas, and Raleigh-Durham, N.C. The company says the regional sites make it easier to trade difficult-to-ship items and create an online marketplace for items of regional interest. eBay now has 30 local sites nationwide.



closed up 2 1/4, or 4%, at 58 1/4 after it said it was buying online games site


IPOs had another strong day.


(OPTV: Nasdaq), which provides software that enables digital interactive television, closed up 42 3/4, or 214%, at 62 3/4. Also,

(GTHR: Nasdaq), a provider of Internet-based travel procurement and supply solutions primarily for businesses and travel suppliers, closed up 8 1/2, or 53%, at 24 1/2;

Official Payments

(OPAY: Nasdaq), which provides electronic payment options to government entities, finished up 7 1/2, or 50%, at 22 1/2; and

(DDDC:Nasdaq), a provider of Internet protocol telephony services, ended up 14, or 93%, at 29.