Buy the rumor, buy the fact. By the by. Buy, buy, buy. For that matter, bye-bye
-- at least for another month.
The technology sector went on buying sprees both before and after the
announced that it was not raising interest rates. The
ended the day up 81.38 points, or 2.1%, at 3940.34, though gains were more pronounced in other areas of the Nasdaq (like biotech) than the Internet sector.
TheStreet.com Internet Sector
index ended the day up 19.22, or 2.3%, at 843.12. Traders may be excited about prospects for month-end/quarter-end buying. And some poor misguided souls, who listen to certain television analysts and perhaps believe the Fed is done raising interest rates, may have been buying as well.
Any number of stocks celebrated. Among the day's big winners,
ended the day up 4 3/4, or 10.8%, at 49 15/16 on news that it was teaming with
to develop and distribute Internet media technology for mobile devices. As part of the agreement, Nokia and RealNetworks will implement RealNetworks' RealPlayer technology in Nokia's EPOC-based communicators and smart phones.
Among other big movers, Internet incubator
closed up 4 9./16, or 10%, at 49 5/16 and
Internet Capital Group
added 2, or 6%, at 34 3/16. Infrastructure plays
was up 12 7/16, or 8.5%, at 159 11/16, while
finished up 10, or 7.9%, at 136 7/16.
bounced back from losses suffered Tuesday on news that
had purchased FreeMarkets' competitor
. It closed up 3 13/16, or 8.6%, at 48 3/8.
closed up 3 9/16, or 21%, to 20 3/16;
added 2 1/2, or 9%, to 29 3/8;
ended up 5 3/8, or 12%, to 50 3/4; and
added 7 3/64, or 18%, to 45 63/64 on news that it was listed on
10 Uncommon Values list, along with the aforementioned Juniper Networks.
2:03 p.m.: Tech Stocks Rallying Ahead of Fed
The technology sector was not waiting for the
to say it was not raising interest rates (as is widely expected), rallying into the Fed announcement scheduled for this afternoon. The
was up 74 to 3933 in recent trading.
Why all of the enthusiasm? First of all, the market has not truly rallied into a steady Fed stance (as is widely expected). As Dick Dickson at
Scott & Stringfellow
pointed out, the market has staged a big rally going into the last couple of Fed meetings, only to fade once the news about the rates is out. This time around, he notes, there has not been a rally and the Fed is expected to keep rates unchanged, so perhaps that is behind Wednesday's enthusiasm. And while a rise in bearish sentiment indicates to him that there could be a potential rally (a contrarian viewpoint), he also was not expecting a huge rally since there is nothing in the longer-term technical picture that would suggest a "big move upward."
Among the Internet sector's better performers was
, up 4.6%. The stock has been beaten up over the past week due to concerns over its revenue growth. And another battered e-tailer,
, was on the rise as well, up 16.1%.
While Amazon's support was likely coming from bargain hunters or traders covering short positions, eToys' gains were more tangible.
initiated coverage of the online toy store with an outperform rating, but also had some kind words about the company, which flies in the face of the sentiment of some investors that saw eToys heading for the cyber-scrap heap.
"We believe that eToys will survive the current market shakeout to become one of the world's leading online retailers of children's products," wrote analyst Kevin Silverman. "In a very short time, eToys has built one of the most visible and most capable brands in the children's products marketplace. With $100 million in new funding, eToys has enough cash to operate midway through FY2001."
Investors also were scrambling to buy into some of the sector's more favored plays.
was up 4.2%;
was up 6.7%;
was up 5.4%;
was up 7% and
was up 16.2%. Both BEA Systems and Juniper Networks were mentioned on
10 Uncommon Values list.
10:52 a.m.: Tech Stocks Easing Higher Ahead of Greenspan & Friends
has weighed in with its briefcase indicator (contending it suggests no raise in interest rates -- now there's a reach). Now, we'll let
Alan Greenspan and the rest of the
FOMC members have their say as its two-day policy meeting concludes later this afternoon.
The market was ignoring this morning's strong
report, instead focusing on the conclusion of the Fed
meeting amid hopes that the Fed will leave rates unchanged and the market can push forward from here. In early trading, the
was up 58 to 3917.
In an otherwise slow day,
10 Uncommon Values list was generating some interest. We provided you with all the details in an earlier
piece, but repeat here that over the past 51 years, the list has returned average annual returns of 16.96% vs. the
9.5%, one reason it gets attention.
Among the tech members on the list and how they were performing early Wednesday were:
, up 12%;
, up 11.2%;
, up 8.2%;
, up 5.4%;
, up 6.1%;
, up 1%;
, up 3.1% and
, up 7%.
came out with an interesting note on
, initiating coverage with a buy rating and a price target of 50. What's interesting is that analyst Kevin Silverman suggests that the company could surprise people now that expectations for the company have been so shattered.
The note, titled "Amazon.com is best-of-class in a channel that will get very, very big," claims that, "with diminished expectations, the company is ready to improve costs and turn profitable faster than people think." Silverman wrote that he expects Amazon.com to accelerate reduction of discretionary expenses, increasing productivity, and benefit from rapid channel adoption around the world in the next few quarters. Amazon.com was up 0.9% early on.
In other analyst actions,
Salomon Smith Barney
put out its June quarter preview for e-commerce companies, singling out
, and expecting them to have "robust" results. Analyst Tim Albright noted that the June quarter is generally the slowest period for all consumer Internet businesses, though both priceline and Ticketmaster-Online CitySearch should show seasonal strength.
In recent trading priceline was up 1.9%, while Ticketmaster Online-CitySearch was down 0.7%. Salomon has done underwriting for both priceline and Ticketmaster Online-CitySearch.
US Bancorp Piper Jaffray
to buy from strong buy "due to lack of a near-term catalyst caused by recent slow growth in the e-commerce marketplace. The price target on the stock was lowered to 7 from 15.
Analyst Gregory Konezny did write that he expected BUY.COM to be a survivor in the e-commerce shakeout and was maintaining a positive long-term outlook on the company. It was up 1.9%. The firm has done underwriting for Buy.com.