In the Internet sector, normal time often speeds up. Corrections aren't measured in days, but in hours.
TheStreet.com Internet Sector
index closed up 0.48 points at 1129.00, far from its intraday low of 1085.37. It found support ahead of the Dec. 20 low of 1079.19.
"It's the same old thing, buying on weakness," said Dan Marciano, head of equity trading with
Marciano said he said he expects decent volume again tomorrow, but potential for volatile trading from Wednesday through Friday due to the end of the 1999 settlement period. Trades take three days to settle, meaning that Tuesday will be the last day to have a 1999 trade settle in 1999. With volume potentially drying up beginning Wednesday, Marciano said there could be an increase in volatility.
Pronounced turnarounds were seen in any number of stocks.
closed up 12 3/8, or 3%, at 415 after trading as low as 377 7/8. The stock continues to benefit from the belief that it will eventually split. In addition, the company said order volume in
rose more than 385% from last year.
, an Internet juggernaut, closed up 7 5/16, or 2.7%, at 278 1/8 after trading as low as 246.
If there was a trigger for this morning's weakness, it may have been the ongoing selloff in a couple of e-commerce plays. Both
floundered again today. While there has been no question that e-tailing sales were strong over the holiday period, investors were questioning at what cost the sales were made.
Amazon finished down 8 7/8, or 10%, at 81 1/8 as traders continued to be concerned over the company's fourth-quarter margins. eToys ended off 5, or 16%, at 25 15/16 following a downgrade of the stock by
, a company that has done underwriting for eToys. Analyst Lauren Cooks Levitan indicated that difficulties in fulfilling high levels of last-minute orders "could negatively impact the company's gross margin rate in the quarter as a result of shipping upgrades and reshipped packages."
took a closer look at e-tailers in a recent
Price action in
was also more than a bit interesting. It finished the day down 5/8 at 54 3/8 after trading as high as 58.
The stock traded higher on the open on news that it was planning to offer a name-your-own-price auction service. priceline is attempting to differentiate itself from other auction sites by letting bidders name the lowest price they would pay for an item, and its focus was on items that people were looking to get rid of rather than collectibles that are the focal point of many sites like
. priceline dropped at midday along with the rest of the Net sector, but popped up again during priceline founder Jay Walker's appearance on
. Some traders may have been anticipating a pop to coincide with Walker's TV spot, and sold into the strength.
Other online auction sites were mostly weaker. eBay finished down 8 5/16, or 5.8%, at 134, while
ended down 2 7/16, or 7%, at 32.
One stock that was strong most of the day was
. The business-to-business play began trading at its post-3-for-1 split price today. The "bargain price" was certainly attractive to investors, who drove the stock up 57 3/8, or 29%, to 256 7/16 today.
Despite the recovery, John Murphy, president of
technical analysis, said he saw potential for the selloff to last into the new year. Murphy said that the Net sector could be seeing a little of the January effect a bit earlier than normal. One characteristic of the January effect, he said, was that investors dump winners and buy more value stocks, and that could be going on earlier than usual.
Murphy did say that many technical indicators he uses were showing the sector was still overbought, with momentum indicators turning down. In addition to 1079, he sees some minor support around the 1058 area, with the potential to move to 1000 if that level does not hold. Murphy said he was recommending people sell in the tech sector ahead of the January effect.