Trading in technology and Internet stocks has become more and more a momentum play. When momentum is up, we get days like yesterday, when the Nasdaq rallied for more than 100 points. When momentum is down, we get days like today, when the Nasdaq dropped around 90 points.
Sure, a 2% drop is significant, but for the week the Nasdaq was still up around 150 points, or 3.5%.
TheStreet.com Internet Sector
index, or DOT, finished down 23.06, or 2.0%, at 1154.44, slightly higher than where it began the week at 1140.26. The DOT traded as high as 1184.12 today, but still needs to climb above its all-time high of 1191.74 from Jan. 24 to convince technicians it can go higher near term.
There was no trigger for the selloff, though ongoing weakness in the broader market may have contributed to the setback. And
closed down 6 1/16, or 5.7%, at 99 15/16 after a technology consulting concern cautioned that some companies might encounter compatibility problems with Microsoft's soon-to-be released Windows 2000.
But after some big moves this past week, the temptation to book some profits appeared to be too great, particularly with earnings season all but over. Momentum took care of the rest. And we'll reserve judgement that the selloff will be anything but a one-day wonder, particularly because any recent setbacks have been a buying opportunity more than anything else.
Among the leading point decliners were a couple of traditional Internet bellwethers.
closed down 22 5/16, or 6%, at 342 11/16. The stock will reflect a 2-for-1-split price beginning Monday.
finished down 9, or 5.5%, at 153 3/8. There was no real news on eBay, though consumer-oriented e-tailers continued to fall out of favor.
That factor was seen in one of the day's IPOs,
, which closed flat at 11 in its debut after trading as high as 14. Also,
, the online retailer that went public on Tuesday, finished down 5 1/16, or 19%, at 21 3/8. Its high of 30 1/8 was reached on its opening day of trading, and it has been unable to climb above that.
Among the leading decliners of note was
, an online bookstore for professionals. The stock closed down 6 7/8, or 33%, at 13 7/8 after
Banc of America Securities
downgraded the stock to buy from strong buy.
But even with the market dropping, it was a successful day for another IPO,
, a business-to-business software company. It finished up 177 5/8, or 507.5%, at 212 5/8. And gains in WebMethods helped lift some other companies in similar businesses.
closed up 20 15/16, or 25%, at 104, while
closed up 2 13/16, or 16%, at 20 5/8.