Internet investors rarely show restraint, so it was somewhat surprising yesterday when the Internet sector lagged far behind the rest of technology sector in its post-decline recovery. There was no such restraint today.
TheStreet.com Internet Sector
index was up 90.96, or 12.5%, at 818.12 in recent trading. Short-covering was likely contributing to gains, but other investors were surely picking through the rubble for bargains. Virtually all sub-categories in the sector were rallying. Check out
piece on why you should take advantage of today's pop and get out of some of the sector's more risky issues.
Among traditional Internet stocks,
was up 6 9/16, or 14%, at 53 5/8. Amazon announced an investment in
, an online wine seller that launched today for California residents, and is expected to serve between 70% and 80% of the U.S. market by the 2000 holiday season.
was up 9 1/4, or 8%, at 123 5/8, and
was up 1/2, or 1%, at 59 1/4. AOL is scheduled to report earnings after the close today. The super Internet service provider is expected to report earnings of 9 cents a share, according to
First Call/Thomson Financial
Business-to-business plays were on the warpath again as well, due in part to positive quarterly
. FreeMarkets was up 4 7/8, or 9%, at 57 5/8, though it had traded as high as 64. Also,
was up 16 3/16, or 33%, at 65 1/16;
was up 13 1/16, or 17%, at 92; and
was up 9 7/8, or 14%, at 80 1/4.
Among other hot stocks,
was up 13 9/16, or 19%, at 83 9/16;
was up 21 1/4, or 20%, at 132; and
was up 20 1/2, or 22%, at 112 1/2. Inktomi will report quarterly financials after the close today; the estimate is for a loss of 2 cents a share.
Earnings could continue to drive many Net stocks and should play more of a role in the day's events once the feeding frenzy dies down. And according to one market trader, while the worst is likely behind the market, more of a range trade could develop in the coming weeks. The trader said focus may shift to the
and how aggressive the Fed may be in raising interest rates. The trader said last week's strong
Consumer Price Index
report came at the wrong time for the market, and will place added emphasis on inflation data in the coming months, as well as other economic data, should it suggest the Fed may need to raise rates more than the market is anticipating.
The trader said there has been a definite shift in sentiment toward the Net sector and second- and third-tier stocks will not recover as quickly as the market leaders. With expectations for a more back-and-forth trade, the trader said he would be selling on strength (i.e., today) and buying on weakness until he got a clearer picture of the interest rate scenario.