As happens with the Yankees, when the stock market goes on a two-day losing streak panic grips the streets of New York. But all's well on Wall Street (and in the Bronx) today after recent losing streaks have come to their ends.
The
Nasdaq
ended the day up 128.93, or 3.2%, at 4184.56, erasing yesterday's 121-point loss.
TheStreet.com Internet Sector
index ended up 32.09, or 3.9%, at 865.15.
There were a number of fundamental and technical factors that played a role in the day's gains. Positive earnings reports from a number of high-tech stocks provided a lift throughout the sector. But perhaps more importantly, the strong earnings came a day after many of the stocks had slipped in advance of their reports. In the past two sessions, traders had booked profits on stocks that had reported, regardless of whether the results were good or bad.
In addition, some of yesterday's weakness was blamed on concern ahead of
Federal Reserve
Chairman
Alan Greenspan's
appearance on Capitol Hill. But the Grand Poobah of monetary policy presented relatively balanced
testimony that did not rekindle fears of a rate hike by the Fed. Options expirations coming up tomorrow also may have played a role.
Losses over the previous two sessions also took the Nasdaq into an area where technical traders may have been looking to buy. The 4000 level was seen as a solid support level, with technical indicators still suggesting a push toward 4400 or 4500.
The room was littered with big gainers. Among traditional Internet plays,
Yahoo!'s
(YHOO)
post-earnings run continued, up 5 13/16, or 4.3%, at 139 13/16. Also,
America Online
(AOL)
closed up 2 3/8, or 4%, at 61 3/4, ahead of this evening's earnings report.
Inktomi
(INKT)
also rallied into its numbers, closing up 6 3/8, or 5.2%, at 129 7/16. And
Lycos
(LCOS)
finished up 7 1/16, or 13%, at 60, after company CEO Bob Davis said the company's merger with
Terra Networks
(TRRA)
was on track.
Among stocks that reported earnings yesterday,
Check Point Software
(CHKP) - Get Report
closed up 18 3/8, or 8.2%, at 243 1/4;
PurchasePro.com
(PPRO)
added 7 5/32, or 17%, to 49 21/32; and
Exodus Communications
(EXDS)
tacked on 8 3/8, or 16.5%, to 59 3/16.
Among the day's big winners was
JDS Uniphase
(JDSU)
, up 21 3/8, or 20%, at 128 1/8 on
news that it would be added to the
S&P 500
.
On the downside, shares of
Foundry Networks
(FDRY)
continued to slide after they reported earnings on Tuesday. Foundry finished down 13, or 13%, at 85 1/8 after falling 21% yesterday. And
Excite@Home
(ATHM) - Get Report
dropped 1 1/5, or 6.6%, to 17 3/4 after reporting mixed results.
2:02 p.m.: On Day of Rebounds, Check Point, E.piphany, PurchasePro Bounce Back
Solid earnings and no real surprises from the Big Man were keeping tech stocks on an upward path.
The
Nasdaq
was up 111.1 to 4166.7 in recent trading, holding a triple-digit gain for much of the session.
TheStreet.com Internet Sector
index was jumping 27.65, or 3.32%, to 860.71.
The market took off after seeing relatively even-handed
testimony from
Federal Reserve Chairman
Alan Greenspan in his appearance this morning before the Senate Banking Committee. Stocks that had reported good earnings overnight were generally faring well, in part because they had sold off yesterday.
Check Point Software
(CHKP) - Get Report
was up 7.6% after dropping 10% yesterday. Also,
E.piphany
(EPNY)
was up 4.5% after falling 10% yesterday. And
PurchasePro.com
(PPRO)
, which fell 15% yesterday, was up 13.5% today.
Exodus Communications
(EXDS)
, which also had solid numbers, was up 10.5%. It had slipped about 8% over the past three sessions.
Focus also was on a number of stocks that will report earnings after the close today. Among those,
America Online
(AOL)
was up 3.9%;
Inktomi
(INKT)
was up 5.5%;
Alteon WebSystems
(ATON)
was climbing 15.3%;
Broadvision
(BVSN) - Get Report
was up 10.3%; and
CNet
(CNET) - Get Report
was up 7%. CNet fell 8% yesterday after agreeing to buy
Zif-Davis
(ZD)
.
On the downside,
Foundry Networks
(FDRY)
, which slid 21%
yesterday following its earnings report, was off another 7% today. Also,
Excite@Home
(ATHM) - Get Report
, which had mixed results, was down 6.3%.
Those still holding Internet retailing stocks will want to check out Katherine Hobson's
piece on
TheStreet.com
about whether the sector can turn things around after a dismal first half of the year.
Amazon.com
(AMZN) - Get Report
was up 3.8% in midday trading;
eBay
(EBAY) - Get Report
was up 3%; and
priceline.com
(PCLN)
was moving up 0.31%.
11:00 a.m.: JDS Pops on Call-Up to the Big Leagues; CDNow Finds a Hero
Tech is back on the move this morning, with the
Nasdaq
jumping 120.9, or 2.98%, to 4176.5 in early trading after seeing profit taking pressures over the past two sessions.
TheStreet.com Internet Sector
index was up 24.17, or 2.9%, to 857.23. Focus was on
Federal Reserve
Chairman Alan Greenspan's testimony before the Senate Banking Committee. There were no surprises from the Fed chairman, and stocks are seeing relief after some selling pressures yesterday on concern over the appearance.
First off, an acquisition.
CDNow
(CDNW)
finally found someone that wanted it. German media firm
Bertelsmann AG
said it would buy the online music seller for $3 a share, or $117 million. That was a tiny premium from the 2 7/8 price that CDNow closed at on Wednesday. CDNow was up 2.7%.
JDS Uniphase
(JDSU)
was another non-earnings mover. It was up 17% on
news that it would be added to the
S&P 500
. And
SDL
(SDLI)
, which is being bought by JDS, was up 15%.
Also,
Net2Phone
(NTOP)
was up 1.6% on news that it had entered a deal with
Microsoft
(MSFT) - Get Report
to offer free phone calls to users of Microsoft's Internet messaging service.
Among companies that reported earnings after yesterday's close,
Exodus Communications
(EXDS)
was up 10.6%. It beat estimates with a 10-cent loss for its second quarter versus the 12-cent estimate. Analysts had positive things to say about the company.
ING Barings
analyst Youssef Squali reiterated a strong buy rating on the stock, noting that revenues of $179.6 million topped his estimate of $171.2 million and showed a 34% sequential increase. He increased revenue estimates for 2000 and 2001, though he also lowered loss estimates due to a higher level of debt service. And
Chase H&Q
upgraded the stock to strong buy from buy.
Excite@Home
(ATHM) - Get Report
was down 4.6% after reporting mixed results. Excite@Home posted a loss of 11 cents for the quarter versus the 12-cent loss estimate.
Merrill Lynch
downgraded Excite@Home to long-term accumulate from long-term buy after the report.
Chase H&Q analyst David Levy focused on the subscriber growth for @Home, which showed a sequential decline. The company added 300,000 subscribers during the quarter, 50,000 fewer than the previous quarter. But the decline was blamed on a temporary interruption in the supply of cable modems available to some of @Home's cable partners due to a fire at one of the supplier's factories. Levy writes that the shortfall "was more severe than we had anticipated." He recommended "a more cautious approach" to the stock due to "the changes in business plan, the 2Q000 subscriber shortfall and greater-than-expected future losses."
In the business-to-business space, shares of
PurchasePro.com
(PPRO)
was up 17.5%. The company reported a loss of 22 cents a share versus the 30-cent loss estimate. It also said it expected to turn a profit by the second quarter of next year.
Finally,
Extreme Networks
(EXTR) - Get Report
was up 14.5%. The company reported reported fourth-quarter earnings of 1 cent a share, which includes amortization of goodwill and other charges. Excluding items, the company reported pro forma earnings of 9 cents a share. The 11-analyst estimate was for a loss of 5 cents. Also, the company's board approved a 2-for-1 stock split.
