Pulse: Mixed Bag for Tech on a Day the Comp Sighs With Relief - TheStreet

Pulse: Mixed Bag for Tech on a Day the Comp Sighs With Relief

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Tech stocks managed to eke out small gains in what will have to pass as a positive day for the battered sector. Investors were bargain hunting in some issues, but still kept pressure on others.

The

Nasdaq

ended the day up 44.38, or 1.2%, at 3893.89, holding onto earlier gains and forcing shorts to cover into the close.

TheStreet.com Internet Sector

index finished up 5.95, or 0.8%, at 799.25.

Weakness in

Intel

(INTC) - Get Report

held the tech sector back. Intel was cut to market perform from strong buy at

Banc of America Securities

over demand concerns. It ended down $3.69, or 5.7%, at $61.25.

Among the day's winners,

Knight Trading Group

(NITE)

closed up $6.63, or 22.5%, at $36.06. With all of the recent mergers in the financial sector, there was

speculation that the market maker could be the next one targeted for a buyout.

Online brokerages benefited from the news as well.

E*Trade

(EGRP)

closed up 81 cents, or 4.4%, at $19.31, while

Ameritrade

(AMTD) - Get Report

climbed $1.38, or 7%, at $20.63

Also showing gains were a couple of market favorites that have slipped of late.

Check Point Software

(CHKP) - Get Report

, which went from $158.50 on Sept. 5 to $135.50 on Sept. 11, closed up $11.13, or 8%, at $151.88. And

Juniper Networks

(JNPR) - Get Report

closed up $8.88, or 4.7%, at $198.63.

Profit-takers helped take the stock from $228 on Sept. 5 to $181.75 on Monday. Short-covering may have helped shares of

Vignette

(VIGN)

, which closed up $3.06, or 9.2%, at $36.44, while

BEA Systems

(BEAS)

, which was featured prominently in last week's

Barron's

, closed up $4.44, or 7.3%, at $65.56.

On the downside,

Ventro

(VNTR) - Get Report

closed off $1.63, or 9.7%, at $15.13 after

VerticalNet

(VERT)

said it was not considering buying the e-business company.

Among traditional Internet plays,

America Online

(AOL)

closed up 19 cents, or 0.3%, at $56.19.

The Wall Street Journal

reported that the

Federal Communications Commission

may force AOL to open its instant-messaging service to rivals as a condition for its approval of AOL's merger with

Time Warner

(TWX)

.

And

Inktomi

(INKT)

ended down $2.25, or 2.0%, at $108.75 after the company said that it had signed a deal with

FastForward Networks

, which provides software for distributing streaming media over the Internet. The deal was valued at $1.3 billion.

2:41 p.m.: Tech Mixed in Afternoon Action

A mixed market has produced its share of winners and losers as investors attempt to sort out whether the market has been beaten up enough.

In recent trading, the

Nasdaq

was up 35 to 3884. It had traded within a range of 3794.29 and 3881.12.

TheStreet.com Internet Sector

index was up 5 to 798.

Yesterday, we

noted how our own Jim Cramer was getting cautious on tech. Apparently, some of his "fans" saw his comments that he was turning negative on tech as a sign that a bottom was in place, using Big Jim as a contrarian indicator. Here is his response.

"To those who regard my capitulation as a 'market bottom,' may I suggest that you didn't make too much money betting against me the last time I said to take it off the table. But be my guest."

Love the man's gumption.

Highlights among new economy stocks included

Knight Trading Group

(NITE)

, up 18.3% amid

talk that it could be the next financial institution targeted for a buyout. Online brokerages were benefiting from the news as well.

E*Trade

(EGRP)

was up 3%, while

Ameritrade

(AMTD) - Get Report

(AMTD) - Get Report

was up 5.2%.

Investors in

Copper Mountain Networks

(CMTN)

were simultaneously scratching their heads and pulling their hair out. The stock was down another 6.5% today. It has lost around 65% of its value since trading above 125 on July 17 on concerns over competition, causing it to fall out of favor with momentum investors. The company actually presented at a

Dain Rauscher Wessels'

technology conference, but apparently did not say enough to appease investors.

Nevertheless, Dain Rauscher, which has done underwriting for Copper Mountain, maintained a strong buy rating and a whopping $150 price target on the stock.

Finally,

VerticalNet

(VERT)

was down 5.6%. The electronic commerce operator was ripped in a research note from

Wedbush Morgan Securities

. In a note from Sept. 11 titled "VerticalNet: Is pollutiononline really worth $60 million or is that solid waste," analyst George Santana takes issue with the stock's valuation. He notes that the stock's share price suggests that each of its 57 Web sites (pollutiononline being one of them) is worth an average of $60 million, while traffic to its communities was "very light."

"Given the sites' light traffic and the minimal amount of eCommerce on the sites, we are hard pressed to justify the current high valuations per Web site," he wrote.

11:07 a.m. EDT: Tech Reverses Course into Positive Territory

Bargain hunters were attempting to keep the technology sector afloat this morning, though price action was similar to yesterday's session when the market was unable to maintain gains into the close.

In recent trading, the

Nasdaq was up 20.6 to 3870.1 after trading as low as 3794.

TheStreet.com Internet Sector

index was up 6.97 to 800.27. The market remains in the midst of earnings warning season, which has created some angst of late.

Inktomi

(INKT)

was up 38 cents, or 0.3%, to $111.31 on news that it had purchased

FastForward Networks

, a private company that provides software for distributing live broadcasting over the Internet for $1.3 million. Terms of the deal call for Inktomi to issue approximately 11.9 million shares of stock for FastForward Networks. According to a press release on the deal, all of the FastForward employees will join Inktomi.

America Online

(AOL)

was off 1.06, or 1.9%, to $54.94.

The Wall Street Journal

was reporting that the

Federal Communications Commission

may force AOL to open its instant-messaging service to rivals as a condition for its approval of AOL's merger with

Time Warner

(TWX)

. The story also indicates that Time Warner may be forced to open its high-speed cable lines to competitors beyond the extent it already was doing.

AOL also said it had launched a service through its

Netscape

division that will help small businesses get online. It will compete with similar services offered by both

Yahoo!

(YHOO)

and

Microsoft

(MSFT) - Get Report

.

PurchasePro

(PPRO)

was getting little mileage out of news that it had formed an alliance with

Computer Associates

(CA) - Get Report

. It was off 94 cents, or 1.5%, to $61.81, while Computer Associates was off 69 cents, or 2.4%, to $28.50.

The alliance will include technology integration, joint channel development and co-marketing efforts. PurchasePro is a provider of business-to-business e-commerce, while Computer Associates is an e-business solutions provider.

Shares of

Ventro

(VNTR) - Get Report

were off $1.19, or 7.1%, to $15.56. Losses came on

news that VerticalNet

(VERT)

said it was not considering buying the beleaguered company.

In a release last night, VerticalNet said that as a general rule, it doesn't comment on rumors, but that it wanted to nip this one in the bud. So, it did. Speculation over the two companies pairing up started

last week after Ventro ducked out of some high-profile public appearances.

The announcement didn't stop the slide in VerticalNet's shares, though. It continued downward for the fourth straight day, off $1.69, or 3.8%, to $44.81.

Senior writer Joe Bousquin contributed to this story.