The day after a big party is often painful for overindulgent participants. And many of those who took part in the pre- and post-Fed rally Tuesday, were feeling slightly hung over today.

Perhaps waking up to the realization that a 50-basis point rate increase isn't necessarily a good thing for the stock market, particularly if there is more to come, investors saw stocks taking a dive today. The

Nasdaq Composite Index

was down 83.63, or 2.3%, to 3633.94 in recent trading, giving back much of yesterday's 109.92-point gain, while

TheStreet.com Internet Sector

index was down 32.92, or 3.5%, to 896.70. For those looking for the basics of technical analysis, our own

Gary B. Smith

provides the second in a two-part series on reading charts in an earlier

piece.

There no doubt was some kind of party to toast yesterday's announced

merger between

Lycos

(LCOS)

and

Terra Networks

(TRRA)

, though its participants may also be looking for the bottle of

Advil

. Lycos was down 6, or 8.3%, to 66 5/8 in early trading, while Terra was down 3 5/8, or 6.8%, to 49 15/16.

There were at least two downgrades of Lycos following the announcement.

Jefferies & Company

downgraded the stock to hold from buy, saying that the stock was "reasonably valued for the short-term relative to the buyout offer from Terra Networks and the valuation risk associated with Terra stock." Analyst Fred Moran wrote that, while he thought the long-term potential of the combined entity "could be meaningful, uncertainty regarding integration after the closing could stifle the stock from achieving further near-term upside."

Likewise,

ABN Amro

downgraded Lycos to hold from outperform, though not due to a negative view of the deal. Analyst Arthur Newman wrote that he expected a bump in the share price of Lycos today to close the gap between its closing price yesterday and the acquisition cost. But, he noted that until the deal closes in the third quarter, "we believe there will be little upward momentum and material risk of downward pressure as investors analyze the transaction and valuation."

However,

Deutsche Banc Alex. Brown

maintained a strong buy on Lycos, saying the deal "minimizes the risk of shareholder resistance over financial concerns." Analyst Andrea Williams noted that as long as Terra's stock is within a 45 to 68 range, Lycos shareholders will receive the 1.7 exchange rate, or $97.55 a share. If Terra's stock is below that range, the exchange ratio rises to a maximum of 2.15, and if Terra's stock is above 68, the exchange ratio falls to a minimum of 1.433.

Finally,

Merrill Lynch

lowered its intermediate rating on Terra to neutral from accumulate. Analyst Peter Bradshaw wrote that the premium paid for Lycos "may outweigh the synergies gained. As a result, we expect a transfer of value toward Lycos and away from Terra."

Elsewhere, a couple of stocks were moving ahead of coming events.

Yahoo!

(YHOO)

was down 7/16, or 0.3%, to 136 1/16. The superportal will hold an analysts' day tomorrow.

Goldman Sachs

reiterated a recommended-list rating for Yahoo!, indicating that the meeting would "showcase Yahoo!'s opportunities and likely be a catalyst for the shares."

Goldman analyst Michael Parekh noted that there should be discussion on Yahoo's opportunities in its core business, international expansion and ongoing initiatives in the broadband, wireless, communications, and commerce arenas, along with an update on its partnership opportunities with a wide range of telco, technology and media partners worldwide.

Phone.com

(PHCM)

also will be holding an analysts' day tomorrow. Goldman analyst Vik Mehta wrote that shares of Phone.com would likely benefit from the event. Mehta wrote that "while it is difficult to invest around an upcoming analyst day, we often find that such events serve as important catalysts for new investors to build positions in the coming weeks." Phone.com was down 2 3/4, or 3.4%, to 79 1/4 early on.

Finally, shares of

Tickets.com

(TIXX)

were up 5/8, or 17.9%, to 4 1/8.

Morgan Stanley Dean Witter

reinitiated coverage of the online ticket seller with an outperform rating, saying there was a buying opportunity in the stock due to positive prospects for the second and third quarters.