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Two publicly traded Web sites announced their closures Tuesday, and rumors swirled that another large site was about to die. Another downer day in the Web space?

Not really --

The Street.com's Internet Sector Index

closed up more than 2%. As for

CMGI

(CMGI)

, the company rumored to be closing a large business-to-consumer site -- its shares were up sharply, closing more than 13% higher to $23.67.

For some of the Web's better-known names it was a good day, with investors reacting well to the idea of sharpening focus and showing some limited optimism in big names.

The CMGI rise came after published rumors that it would close entertainment site

iCast.com

. Both iCast Vice President Stuart Zakim and a CMGI public relations representative denied any substance to the rumors, first published by

Reuters

.

But it boosted the perception that CMGI was willing to drop operations that weren't focused on its core mission and that interfered with profitability. The holding company, owner of

AltaVista

, has focused efforts on selling services and support to Web sites and businesses.

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"It's a signal that the market is receptive to anything the company is doing to become more profitable and to make its operations leaner," said Michael Agarwala, director of equity research at

Ashley Kumar

. (The firm does no investment banking.)

A short time later, Web site

Pets.com

(IPET)

-- yes, the site of the sock puppet mascot -- and vitamin-seller

MotherNature.com

(MTHR)

announced that they would be shutting down operations.

But investors showed confidence in some of the bigger names.

RealNetworks

(RNWK) - Get RealNetworks, Inc. Report

closed up more than 13%, and

eBay

(EBAY) - Get eBay Inc. Report

rose more than 4% to close at $56.67. And it has only been a week since the end of tax-loss selling season, when fund managers cut investors' tax bills by dumping losing stocks.

"The October tech wreck is over. It's November," said Adam Holiber, vice president of research at

Morgan Wedbush Securities

. (His firm has no underwriting relationship with RealNetworks.) "These are leading companies that are going to be leading the Internet."

2:55 p.m. EST: Chips Take a Beating After Cisco's Report

The dainty sneeze in

Cisco's

(CSCO) - Get Cisco Systems, Inc. Report

report yesterday meant that a good many chip stocks caught cold today.

Cisco reported that its inventory stockpile for communications chips rose 59% over last quarter -- enough proof for many that there will be slowdown in demand for chips. That was affecting semiconductor stocks, especially the high-speed and programmable logic devices favored by communication networkers.

Broadcom

undefined

, a maker of high-speed electronics chips, dropped nearly 17% after

W.R. Hambrecht

downgraded the stock from strong buy to buy, citing inventory concerns and the company's strong relationship with Cisco.

Analyst Jim Liang said inventory numbers at both Cisco and

Nortel

(NT)

have confirmed concerns that the big networking companies have put away more components to ensure supply in the coming year.

Cisco accounts for 17% of Broadcom's revenue, and "it is unlikely that Broadcom could go unscathed in the event of an inventory correction from Cisco," Liang wrote.

Other chipmakers suffered today. The

Philadelphia Stock Exchange Semiconductor Index

was trading down more than 5% this afternoon.

PMC-Sierra

(PMCS)

was down more than 16.6% and

Galileo Tech

(GALT) - Get Galectin Therapeutics Inc. Report

, was down more than 14.6% after a

Merrill Lynch

note this morning remarked on their possible exposure to Cisco's inventory issues.

Also suffering: the makers of programmable logic devices, the system on a chip that networkers favor for controlling data traffic. Liang reiterated a hold on

Altera

(ALTR) - Get Altair Engineering Inc. Class A Report

and

Xilinx

(XLNX) - Get Xilinx, Inc. Report

, two of the sector's big players. Similar oversupply concerns caused Altera's shares to drop 20% last week. Altera was trading down more than 10.8%; Xilinx was down more than 10.8%.

Cisco's shares, down this morning, were up more than 3% in the afternoon after

Morgan Stanley Dean Witter

reiterated a strong buy on the stock, noting that the inventory stockpile would allow the company to cut delivery times to customers.

On the other side of the semiconductor street, DRAM maker

Micron Technology

(MU) - Get Micron Technology, Inc. Report

was up nearly 5% after it was upgraded to the recommended list by

Goldman Sachs

. DRAM provides instant memory for PCs and other devices.

Micron had been suffering lately because of a sluggish DRAM market and lower prices. But analyst Joe Moore wrote that the market will work for Micron, predicting that PC makers will use more of the cheaper DRAM in their boxes.