Sure, short-sellers got their heads handed to them today, but there was some good old-fashioned buying going on in the technology sector and it added up to a huge day for many stocks.
was ripe for a rebound after being bashed by analysts over the past few weeks, in part due to fears of an advertising slowdown. But Yahoo! blew away market estimates in its second-quarter earnings report and was off to the races today, carrying the rest of the Net sector on its back, but refusing to buckle throughout the session even with the added weight.
Yahoo! finished the day up 19 7/16, or 18%, at 124 15/16, sending
TheStreet.com Internet Sector
index to a 56.09 point, or 7.4% gain to 809.89. The
soared 143.17 points, or 3.6%, to 4099.59.
It didn't seem to matter to investors whether Yahoo!'s good fortunes could be applied to the rest of the sector, the shopping/short-covering spree persisted through the day. Among the other big winners,
closed up 7 3/4, or 36%, at 29 3/16. CNet did announce that it had added five customers to its list of CNET Data Services licensees, though gains were more likely on some relief in response to Yahoo!'s numbers. Also,
closed up 7 13/16, or 20%, to 46 3/4; and
pushed up 3, or 10.5%, to 31 1/2.
And the wealth was spread all over the Internet space.
climbed 8 11/16, or 20%, to 52 5/8;
soared 5 11/16, or 36%, to 21 5/8; and
gained 3 1/8, or 9.6%, to 35 5/8.
And a quick jump over to the business-to-business sector shows even more outsized gains.
closed up 12 3/8, or 14%, to 103 1/2 ahead of its earnings report after the close. And judging by preliminary numbers, the fun could continue tomorrow. Ariba bested third quarter numbers with a 5-cent loss versus the 8-cent loss estimate. And revenue of $80.9 million was far above estimates of between $47 and $49 million.
Among other B2B plays,
closed up 19 3/8, or 19%, at 119 11/16;
added 9 3/8, or 22%, to 51 7/8;
rallied 7 29/32, or 21%, to 45 29/32; and
ended up 6 5/8, or 17%, at 46 1/8.
1:48 P.M.:Tech Rally Can't Be Stopped
Those long Internet stocks should get on their hands and knees and give thanks to
. Those who shorted Internet stocks after listening to the bearish comments from any number of analysts over the past few weeks are getting those shorts handed to them.
Yahoo! has single-handedly lifted what has been a moribund Net sector, alleviating fears that advertising dollars will dry up. Yahoo! was up 17.2% in recent trading.
TheStreet.com Internet Sector
index, which contains many of the traditional Internet names that have been hammered of late, was up 5.2%. The
Nasdaq was enjoying a triple-digit gain, up 107, or 2.7%, to 4063. Note that the Nasdaq was hovering around the 4064 closing level from June 21, a level technical analysts suggested
Monday could be a focus.
Among those benefiting from Yahoo!'s strong report include
, up 26%;
, up 16.5%;
, up 7.9%; and
, up 5.4%.
Other stocks to benefit from the revived Net euphoria included:
, up 14.7%;
Internet Capital Group
, up 9.3%; and
, up 18.4%.
, which provides e-commerce services to Web site partners, was up 33.3% on a couple of factors. GoTo noted that it had been added to the
Russell 2000 index effective July 1. Also, GoTo announced the extension of an agreement with
to be a leading provider for the Netscape Net Search program for another year.
The wealth also was spreading to other areas in the sector, most notably business-to-business stocks. Among the better performers,
was up 11.3%;
was up 15.2%;
was up 13.2%; and
was up 11.4%.
, which reports earnings after the close, was up 9.3%.
Let's Be Frenk
Readers of this column when it was called Nothing but Net may be familiar with one of our most controversial sources, Steven Frenkel, market strategist with
. Frenkel was on top of the world back in
March when he seemingly called a top in the market, but he's had a tougher time of late. He admitted he had made a mistake with an earlier prediction that the Nasdaq would drop to 2729 when we talked to him in
June but still had a 2800 target.
In the past week, we have received two emails regarding Frenkel, one asking for his outlook, the other asking if Frenkel was my brother-in-law and saying I should "take away the typewriter from this monkey." To which I responded that if Frenkel was so wrong, the reader should be happy to see his comments in the article and do the opposite.
So, in the interest of fairness, we will let you, the reader, decide whether you want to hear from Frenkel again or if you've heard enough. Just take the poll below.
Do you want to hear from Frenkel?
No. He's still an idiot.
Yes. I still respect him.
10:30 a.m.: Yahoo! Helps Net Sector Beat Those Slower-Ad-Revenue Blues
All of the
-bashing over the past couple of weeks certainly lowered the bar for the company when it reported earnings last night, and strong numbers from the Internet bellwether were reverberating throughout the sector.
Yahoo! was up 12.7% in early action. Gains across the group were helping
TheStreet.com Internet Sector
index to a 4.7% rise. The
Nasdaq was up 2%.
Most of the research we found on Yahoo!'s report was positive.
Morgan Stanley Dean Witter's
Mary Meeker said the quarter was "outstanding," indicating the company has "one of the best financial models we have ever seen."
analyst Scott Reamer addressed concerns about a decline in advertising revenue, headlining his report "Ad Spending Slowdown? What Ad Spending Slowdown?" And
analyst Paul Noglows said that "Yahoo! Answers Critics With Solid Q200 Results."
But others were not so kind, indicating that while the quarter was a success, there may still be underlying problems going forward.
analyst Derek Brown, who admitted that he did not expect the company to "outperform as dramatically as it did," nevertheless said he was moderating his stance "based on continued softness in the online ad market, as well as the company's rich valuation." He raised revenue estimates for 2000 and 2001 "by the slightest of margins," to $1.09 billion (from $1.05 billion) and $1.44 billion (from $1.42 billion).
"While management was very upbeat on the conference call about its business prospects going forward," Brown writes, "post-call discussions suggested a more temperate mood."
Dain Rauscher Wessels
analyst Mark Rupe said the second-quarter results "silence ad revenue concerns," though valuation of the stock remained an issue. He reduced his 12-month price target to 150 from 225, due not only to the valuation, but "more importantly to its upcoming mediocre year-over-year (2001 vs. 2000) growth expectations."
Other Internet stocks were piggybacking on Yahoo!'s gains, even though Yahoo!'s seeming imperviousness to the second-quarter slowdown in dot-com ad spending might not extend to the whole group.
was up 12.5%;
was up 7%; and
was up 9%. All had suffered from concerns over advertising revenues.
Elsewhere, shares of
were up 9.5%. According to
The Wall Street Journal
, Exodus is in talks to buy
Global Center Web hosting subsidiary for $7 billion to $8 billion, which the folks over at
claim is a "reasonable" price.
Prudential analyst Michael Turits writes that the deal "would help create enormous scale in Web hosting and could also give Exodus direct access to Global Crossing's international fiber network." He reiterated a strong buy on Exodus and a price target of 75.