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Pulse: <I>Los Toros</I> Return to Tech, Snorting After Previous Goring

Bulls were back in charge in the technology sector, easing some of the pain that bears inflicted the past couple of sessions, though without much help from Internet stocks.



ended the day up 84.31, or 2.1%, at 4097.65, erasing a portion of yesterday's 130-point loss. But Internet stocks were mixed. Internet Sector

index finished down 7.78, or 0.9%, at 838.29. Buying came from bargain hunters who swooped in after losses in the past two sessions.

Because it was an up day, we'll start with a few of the winners. Business-to-business stocks were among the hardest hit over the past couple of sessions after rallying sharply over the past few weeks. Among the better performers in the space,

Commerce One


closed up $7.81, or 12.5%, at $70.50. Gains came on news that Commerce One was expanding its alliance with German software maker


. The two companies will cross-promote and sell their respective e-commerce software as complementary products.

Also benefiting from a partnership was



, which closed up $9.25, or 29%, at $41.38 on news of an

expanded relationship with


(IBM) - Get International Business Machines (IBM) Report

. The companies will jointly market, sell and service a comprehensive retail e-business solution consisting of Retek applications and IBM software and hardware technologies.

And after a rare losing session yesterday,



closed up $5.56, or 3.6%, at $161.88. But before you get too bulled up about Ariba, go check out

Joe "B2B" Bousquin's

piece that contends Ariba may be having some business concerns both in Europe and in the U.S.

There were certainly concerns at


, which tumbled $1.69, or 21%, to $6.19 following yesterday's ruling that it willfully infringed copyright laws, a ruling that could cost the company anywhere from $118 million to $250 million and leaves it

open to other lawsuits.

And a couple of Internet bellwethers resumed their downward spirals.



closed down $5.13, or 4.6%, at $106.94 despite some more balanced comments from

Lehman Brothers

analyst Holly Becker (see comments below). And

(AMZN) - Get, Inc. Report

closed down $2.38, or 5.2%, at $43.50.

2:10 p.m.: Waiting for a Dip Below 4000

Tech stocks may be up today, but technical analysts think a dip below 4000 may be coming for the


After two sharp down days, the Nasdaq was up 64.9 to 4078.2 in recent trading. While gains have given some hope that the market can return back to its winning ways, the Nasdaq has not seen much follow-through to the early gains and remained off its session high of 4105.54. Internet Sector

index was down 12.16 to 833.91.

We checked in with some of our favorite technicians. Dick Dickson, technical analyst with

Scott & Stringfellow

, has been positive about the Nasdaq of

late. But his tune was softening.

Dickson indicated that none of the market indices were oversold at this stage, so he suspected that a rally at this point could prove to be just a bounce. He noted that this was especially the case with the Nasdaq, where losses have come on increasing volume and have broken a short-term uptrend line around the 4140 level.

Dickson goes on to say that 4000 is a key support in the Nasdaq, so a bounce is normal. But he notes that if the bounce is weak and occurred on light volume of less than 1.4 billion shares and negative breadth, he would expect a resumption of the decline with a near-term target of around 3850.

Reached around 1 p.m. EDT, Dickson said the volume was okay, but breadth --meaning winners vs. losers -- was "anemic." He was maintaining his stance. The number of up stocks at midafternoon was 1,899 compared to 1,743 that were down.

Bob Dickey, director of technical research at

Dain Rauscher Wessels

, also sees potential for the Nasdaq to fall back to the 3800 to 3900 level. He notes that is roughly a 50 percent retracement from its recent run-up from 3500 to 4250. How'd he get there? That's the difference between the two levels -- or 750 -- divided by 2, to get 375. Add that to 3500 or subtract it from 4250 and you get 3875).

"The bottom-line to all this mess is that the markets are likely entering a period of rest in the form of a trading range, after running up for the last five weeks. Since the rally period was slow, the consolidation period will likely be similarly quiet. This may be the best we can expect, as the market sorts through the earnings news of the next two months," he wrote.

So how do some play the volatility? Over at

Todd Harrison, head trader and partner with the

Cramer Berkowitz

hedge fund, had some thoughts that bears repeating every once in a while.

"I have received emails asking why we're selling when our tells are indicating strength in the market. It's simple. We are traders. We bought yesterday into the nuclear winter and added exposure. Faded the selloff, so to speak.

Today, with the market ramping, we're parceling out exposure in lots, taking advantage of the early jig. There's nothing wrong with making sales when a stock is up two, three, four. It's what we do. We've been reminded of the modus operandi all year. Buy them when they feel bad, sell them when they feel good."

11:19 a.m.: Becker Now Steps in to Defend Yahoo!

Does anyone miss those lazy, dog days of August when nothing much seemed to happen, but the market still seemed to perform pretty well?

Welcome to September.

After two days of big losses, the

TheStreet Recommends

Nasdaq was up 80.5 to 4093.8 early on. Internet stocks, however, were under-performing. Internet Sector

index was off 0.44 to 846.54.

Buyers came into the Nasdaq with the index holding slightly above the 4000 level.

Lehman Brothers

analyst Holly Becker somewhat softened her stance on



in a note released today. While maintaining a "cautious stance" on the stock, Becker wrote that near-term results "are not at risk." The note was written in response to

comments that Yahoo! CEO Tim Koogle made about online advertising sales.

"There is a period of consolidation under way and it's healthy, as painful as that is," Koogle said at the

Robertson Stephens

Internet conference. "We've been in it for about nine or 10 months, where companies and capital are getting rationalized. It will take a little of the upside away in the near term."

In her note today, Becker wrote that many of the remarks were misinterpreted and investors "appear to be looking for reasons to sell Yahoo! shares." She wrote that although she remained concerned that online advertising growth will slow, Yahoo! has "significant near term flexibility with respect to its reported numbers." She noted that third quarter estimates for Yahoo! are "extremely conservative and already echo a `tough quarter,'" and she would be shocked if Yahoo! missed estimates.

Yahoo! was hit last week after Becker put out an

earlier report. Today, it was lately up 0.9%.

Another Lehman note today was written by Michael Stanek. He noted that


(RNWK) - Get RealNetworks, Inc. Report

has about 18% exposure to advertising in total, of which 6% is dot-com related. While the exposure was limited, he wrote, it could re-appear as an area of concern, particularly with the stock near the top of its near-term trading range.

"While we continue to like the long-term story at Real, we would naive to think the stock will not correct in light of the Yahoo news," he wrote.

Other companies mentioned have limited exposure. He noted that



has only 5% of its revenues exposed to Web-based advertising. He did not see a reason for the stock to react to the news other than moving in sympathy with other Internet names.

Gemstar-TV Guide


, he notes, gets most all of its advertising from traditional main line advertisers and should not be affected.

Finally, Stanek notes that


(MSFT) - Get Microsoft Corporation (MSFT) Report

could be a "safe haven" from the "chip, cap-ex, and dot-com blues." He indicated that Microsoft has set very low expectations and all of the major releases of new products are out in the market or ready to be released to manufacturing.



was down 3%. The company said it will

reorganize its 17 majority owned companies and its venture capital affiliate into six business lines. The announcement was the result of an ongoing strategic review aimed at making the company's disparate businesses more efficient.

Commerce One


up $4.94, or 7.9%, at $67.62 on news that its expanding its alliance with German software maker Intershop. The two companies will cross promote and sell their respective e-commerce software as complimentary products.

Commerce One and Intershop have already teamed up in the past with customers like Shell Chemical. In a press release Thursday, Commerce One said that during the past six months, it and Intershop have worked on "numerous efforts" together, including the integration of Intershop's software into Commerce One's MarketSite software. It said it would demonstrate that integration at its eLink Conference, scheduled for September 18 to 20 in Las Vegas.

The announcement underscore's Commerce One's global focus and aggressive efforts to partner with other software makers to add functionality to its own products. In June, it announced a partnership with German software maker SAP. That partnership, Commerce One has said, has already resulted in six new customer wins for the two companies' combined product.



was among the better performers, up 19.3% on news that the company had expanded its alliance with


(IBM) - Get International Business Machines (IBM) Report

, a move expected to generate revenues of more than $1 billion by 2003. The new elements of the alliance call for both companies to jointly market, sell and service a comprehensive retail e-business solution consisting of Retek applications, IBM software and hardware technologies.


was seeing the fallout from yesterday's court decision that could cost it anywhere from $118 million to $250 million for copyright infringements. It was down 16.3% after trading in the stock was halted yesterday afternoon pending news of the decision.

Web consulting firm



was down 7.1%. The company said it would not see profitability in the third quarter due to slow revenue growth. Organic said its third-quarter revenue will grow 5% sequentially from the $37.2 million reported in the second-quarter. It expects to post a profit by the second quarter of 2001.

Akamai Technologies

(AKAM) - Get Akamai Technologies, Inc. Report

was up 1.3%. The company said it will be the streaming media provider for the

MTV Video Music Awards




(EBAY) - Get eBay Inc. Report

was up 1.5%. There were reports that eBay would be teaming with the


to auction off NFL items like jerseys and footballs for charity.

TSC staff reporter Joe Bousquin contributed to this story.