Net Stocks Show Strength in Early Trading

Foundry powers ahead on news of a stocks split, and eToys reaps the benefits of a Goldman upgrade.
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Despite early weakness in the S&P futures, the Internet sector was moving up with little help from mixed technology stocks.

TheStreet.com Internet Sector

index was up 19.54, or 1.7%, at 1149.04 in early trading.

Yahoo!

(YHOO)

, which closed at all-time high Friday, was down 4 1/4, or 1.2%, at 349 1/4. And

CMGI

(CMGI)

, which is scheduled to report earnings after the close Wednesday, was off 1 7/16, or 0.7%, at 192 5/8.

Inktomi

(INKT)

was up 11 1/2, or 7%, to 179 1/4 after the company said that its search engines would be incorporated into a number of

Microsoft

(MSFT) - Get Report

properties, including MSN Search, MSN Web Communities, MSNBC.com, MSN MoneyCentral, WindowsMedia.com and other MSN international search services.

Excite@Home

(ATHM) - Get Report

was up 5, or 11%, to 51 3/8 after a positive item on the stock ran in

Barron's

over the weekend.

Among

Red Hots,

Foundry Networks

(FDRY)

was up 43 1/2, or 16%, at 321 1/4 after the company said late Friday it would split its stock 2-for-1. Stockholders of record on Dec. 20 will receive one additional share for each share of stock they own. It will take effect Jan. 10. Foundry was up more than 19 points ahead of the split Friday despite little news on the company.

In action by market analysts,

Goldman Sachs

upgraded

eToys

(ETYS)

to buy from market perform with a six-month price target of 65. eToys was up 4 9/16, or 10%, at 49 11/16 in early trading.

Goldman analyst Anthony Noto wrote that the stock's decline of around 42% since October "was overdone due to unwarranted negative sentiment about eToys' estimated holiday performance and long-term outlook." Noto estimated that eToys will exceed his December quarter revenue estimate by at least 20% to 25%. But Goldman is an underwriter for eToys, and Noto has been banging the drum on the stock for much of the holiday season.

Mail.com

(MAIL)

was trading lower after it said it would buy

NetMoves

(NTMV)

in an all-stock deal valued at $173 million. Mail.com, which is a provider of Internet messaging services, was down 3 3/16, or 12.4%, at 22 7/16 on the news, while NetMoves, which provides Internet fax solutions, was up 2 1/8, or 39%, at 7 5/8. NetMoves shareholders will receive 0.385336 share of Mail.com stock for each share held of NetMoves common stock.

Online brokerage

Charles Schwab

(SCH)

Monday said that November trading activity skyrocketed. Schwab said that daily average revenue trades rose 41% to 202,900 in November from October's 144,300. The last time the company saw numbers like that was in April, when daily average revenue trades jumped to a record 207,700 from 155,200. On the year, average daily trades are up by 68%, Schwab said. The company also said that it opened 109,400 accounts during the month, bringing total retail accounts -- both online and offline -- to 6.4 million. Online brokerage stocks, though, were largely unmoved by the news with Schwab falling off 1 5/16, or 3%, to 39 7/16.

Staff reporter

Caroline Humer contributed to this report.