Net Stocks Taking a Breather After Pre-Christmas Binge

One analyst viewed today's losses as a buying opportunity.
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Like Santa's reindeer, the Internet sector helped carry the

Nasdaq

to record heights in the past few months. But even Rudolph needs to take a break every once in a while, and so do Net stocks.

TheStreet.com Internet Sector

index was down 37.50, or 3.3%, at 1091.02 in recent trading. It was closing in on the Dec. 20 low of 1079.19.

Steve Frenkel, market strategist with

Ladenburg Thalmann

, said he was not concerned about the setback and was taking advantage of the losses to get in some positions. Frenkel said the Net sector was just seeing "cross currents" of selling related to the end of the year and he expected the selloff to be "short-lived." Frenkel said a recent rebound in the

Dow Jones

utilities index suggested that the stock market was heading for a strong January and that interest rates and the

Fed

should not be a major concern.

Among particular stocks, Frenkel said he is expecting a major upside breakout in

AppNet

(APNT)

. Today, AppNet was down 1 17/32, or 3.6%, at 41 15/32. He also sees some opportunity in

Rhythms NetConnections

(RTHM)

and

Covad Communications

(COVD)

. Rhythms NetConnections was down 1 7/8, or 6.5%, at 26 15/16, while Covad was down 1 3/4, or 3.3%, at 51 3/4.

Among the worst-performing stocks were some of those that thrived the most during the recent run-up.

Yahoo!

(YHOO)

was down 20 5/8, or 5%, at 382 in recent trading. Internet incubators

CMGI

(CMGI)

and

Internet Capital Group

(ICGE)

were both in the red, with CMGI off 14 7/8, or 5.5%, at 255 15/16 and ICGE down 14 3/8, or 8%, at 168 1/2. And

Inktomi

(INKT)

, which rallied 15 points Thursday after an

upgrade from

Merrill Lynch

, was down 15 5/8, or 8%, at 175 7/8 today.

Some of

James Cramer's

Red Hots and

B2B plays also were suffering.

Foundry Networks

(FDRY)

was off 17 3/8, or 5.8%, at 280 1/16.

VerticalNet

(VERT)

was down 6 11/16, or 4.7%, at 134 11/16.

One stock not taking part in the selling (drum roll please):

Commerce One

(CMRC)

. Investors woke up today with yet one more present under the Christmas tree, Commerce One trading below 200 after it was near 600 just before the holiday. So what if the stock split 3-for-1 after the close Thursday? It was a bargain today, and investors were gobbling it up faster than Aunt Sophie's fruitcake. It was up 45 15/16, or 23%, at 245 in recent trading after dipping to 193.