Net Sector Falters as Investors Flee Nasdaq for Blue-Chips

Infrastructure and B2B were hard hit; however, traditional Internet plays stand in positive territory.
Author:
Publish date:

The Nasdaq seemed intent on heading toward the lows from last week and investors were left to hang on for the ride.

In recent trading, the Nasdaq was off 156.50, or 3.9%, to 3899.40 after reaching a low of 3852.30. That still was a couple hundred points away from its recent low of 3649.11 made on April 4. There was no trigger for the losses, just the ongoing switch out of technology issues and into blue-chips. The

Dow

was up 97.11, or 0.9%, to 11,384.19. Our own knight with a silver lining,

James Cramer

, writes he was buying them when he could, not when he had to, in an earlier

piece.

Jim Herrick, managing director of trading with

Robert W. Baird

, said he was hearing there was a lot of selling due to margin calls for short-term players, but longer term traders should hang in and try to stick it out.

"The market did get ahead of itself. You had extremely high valuations and we had to correct for that," he said. "You had a feeding frenzy on the upside, now you're seeing a domino effect on the downside and some panic selling."

Herrick was not convinced that the April 4 low would come into play. He said that when everyone is thinking the same thing, it often doesn't happen. But he was not too positive on the Internet sector, saying that tech buyers were looking to invest in the larger, better capitalized companies seen as safer havens.

Losses in the Net sector were widespread, and the theme of "the higher they rose, the harder they fell," was continuing. Infrastucture and

business-to-business plays were among the hardest hit.

Efficient Networks

(EFNT)

was down 25 3/8, or 22%, to 87 3/8.

webMethods

(WEBM)

was off 26 7/8, or 15%, to 148 3/8.

Silknet Software

(SILK) - Get Report

was off 10 1/16, or 12%, to 74 1/16.

Kana Communications

(KANA)

dropped 6, or 11.5%, to 46, while

AskJeeves

(ASKJ)

was down 4 1/16, or 9%, to 40 7/16.

If there was a bright spot in the sector, it was performance of some of the more traditional Net plays.

Yahoo!

(YHOO)

was finally able to stand up after a postearnings knockout. It was up 8, or 6%, to 141 1/2, though it was still far from the 165 9/16 level it traded at before it reported last week.

Excite@Home

(ATHM) - Get Report

was up 5/16, or 1.2%, to 27 5/16, while

eBay

(EBAY) - Get Report

was up 1 7/16, or 1%, to 157.