Net Stocks Meander in an 'Unfigureoutable' Market

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Bears have finally been able to give the bulls a good battle over the past couple of sessions, though the head-banging is far from over and it's going to take awhile longer before a victor emerges.

TheStreet.com Internet Sector

index, or DOT, closed down 14.84, or 1.3%, at 1139.60. The DOT seemed to find support ahead of its recent low of 1123.97 from Feb. 7, trading as low as 1125.62 today. Traders concerned that the technology sector remains due for a selloff took advantage of an early pop to get out, while strength in the bond market and gains in the broader market provided some underlying support. The market does face a number of obstacles this week, including

Federal Reserve

Chairman

Alan Greenspan's

Humphrey-Hawkins testimony.

"Don't try to figure it out," said one market participant. "It's unfigureoutable."

There were some late fireworks in the Net sector after

CNBC's

David Faber

reported "exclusively" that

America Online

(AOL)

was in talks to buy

IDT's

(IDTC)

stake in

Net2Phone

(NTOP)

. Net2Phone, a software-maker for phone calls over the Internet, was trading lower before the

CNBC

report a little after 3:30 p.m. EST. It traded as high as 68 3/8, and then finished up 11 3/4, or 24%, at 60 3/4. (IDT closed up 6 5/8, or 30%, at 29 1/2.)

IDT currently owns 48% of Net2Phone's common stock and has 58% voting control. AOL owns 5% of the stock, so a buyout would give AOL more than 50% ownership in the stock. But note that AOL just signed a couple of deals with Net2Phone that won't expire for a couple of years, so it may be a little premature to say AOL would be interested in buying out the company at this time. Last quarter, Net2Phone signed a three-year agreement to provide Internet telephony services to AOL's registered Instant Messenger users. It also signed a two-year agreement to provide Net2Phone Internet telephone calling-card services to

CompuServe's

users.

And while there was speculation surrounding Net2Phone, there were a number of deals that actually were completed and announced today.

Healtheon/WebMD

(HLTH)

was at it again, announcing it would purchase

Medical Manager

(MMGR)

and the 31% stake of

CareInsite

(CARI)

that Medical Manager does not own. Healtheon/WebMD finished up 1 13/16, or 3%, at 56 5/8, while Medical Manager ran up 18 1/16, or 28%, at 86 3/4 and CareInsite gained 2, or 3%, to 72.

CMGI

(CMGI)

also remained an active purchaser on

news it would be buying

Tallan

, a privately held provider of Internet and e-commerce professional services, for $920 million in stock and cash. CMGI closed up 3 1/2, or 3%, at 115 1/2.

And

Phone.com

(PHCM)

closed down 2 7/16, or 2%, at 118 1/2. The company said that it had acquired

Onebox.com

, a wireless-messaging-services company, for around $850 million in stock.

Also,

i2 Technologies

(ITWO)

closed up 19 3/8, or 8%, at 259 7/8. The company said it had formed a joint venture with

United Technologies

and

Honeywell

(HON) - Get Report

to provide a Web site for aerospace products and services.

Finally,

InterNAP Network Services

(INAP) - Get Report

, which provides fast Internet connections to avoid congested public access points, closed up 10 1/2, or 18%, at 69 7/8. We found no news to account for the move, though it could be seeing some ripple effects from last week's incidents involving cyber vandals who crippled a number of sites by bombarding them with requests.