A late bout of profit-taking in the technology sector set Internet stocks backpedaling into the close.
TheStreet.com Internet Sector
index closed down 4.41, or 0.5%, at 834.60 after trading as high as 852.93. Interestingly, that was about the same level it reached on Tuesday when it set an all-time high of 853.06, so technical factors may have played a role.
was again involved in the day's big story. A day after it dropped following introduction of some new product lines, Amazon rallied on news of a credit card
before giving back the gains late in the session. Amazon closed up 1 13/16, or 1.7%, at 72 after trading as high as 75. NextCard finished up 9 3/8, or 30%, at 41, though it traded as high as 53 1/8. Traders who bought yesterday on the
announcement of the announcement may have been looking to take some profits.
Amazon's agreement with NextCard came with very little cost. For doing next to nothing, Amazon is expected to reap up to $150 million over the length of the five-year agreement with NextCard, which will produce a co-branded credit card. By contrast, Amazon will be spending money to start a new home-improvement "store," gross margins in its traditional businesses have not made the company a profit yet and it has drawn the wrath of
"This represents a new 100% gross margin revenue stream for Amazon," wrote Jamie Kiggen, analyst with
Donaldson Lufkin & Jenrette
. "We could see similar deals in different categories for Amazon and view this event as a significant milestone for the Amazon model." DLJ has done underwriting for both Amazon and NextCard.
Also among the day's winners was
, which finished up 6 15/16, or 6%, at 122 1/2 after officials provided some bullish comments about the company's outlook in a call with analysts.
upped its rating on the stock to strong buy from buy, while
Henry Blodget, who
downgraded Inktomi last month, also had some kind words. In a note today, Blodget wrote that new products that Inktomi is expected to announce "address some of our long-term concerns regarding the company's positioning and have the potential to drive further revenue upside and stock-price appreciation."
IPOs also were a raging success.
online travel service closed up 39 7/16, or 282%, at 53 7/16.
United Parcel Service
, which emphasized its Internet angle as a deliverer for e-commerce companies, closed up 17 1/2, or 35%, at 67 1/2. Note that it offered 109.4 million shares. And
, which provides Internet telephony services, closed up 24 1/4, or 152%, at 40 1/4.