Internet Stocks Skyrocket

The tech-heavy Nasdaq is leading the rest of the major indices higher.
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The tech-chunky

Nasdaq Composite Index

was soaring 3%, as Internet stocks caught fire while financial stocks rallied going into the final hour of trading.

The

Nasdaq Composite Index

was up 73 to 2382.

TheStreet.com Internet Sector

was up 44 to 495.

TheStreet.com E-Commerce Index

was up 9 to 103.

Elsewhere, the

Dow Jones Industrial Average

was up 109 to 9286.

Ricky Harrington, senior vice president and technical analyst at

Interstate/Johnson Lane

, said the rally today was a technical recovery led by the tech stocks, which have bounced back after the recent harsh selloff.

Also, he said, perhaps contributing to the rally was relief that

Federal Reserve

Chairman

Alan Greenspan

didn't say anything negative for the market in his testimony before the

House Banking Committee

.

Bank, brokerage and insurance stocks were flying thanks to the Fed chief's testimony. Greenspan reaffirmed his support for financial services reform legislation in an appearance before the House panel.

The

Philadelphia Stock Exchange/KBW Bank Index

was up 3%, while the

American Stock Exchange Broker/Dealer Index

surged 5%. The

S&P Insurance Index

jumped 4%.

Near term, Harrington said he sees the Dow in a trading range of perhaps 9100 to 9400. The market may now be driven more by technical factors going forward because earnings season for the most part is out of the way, he added.

Harrington said there's a better chance for the market to break out on the downside rather than the upside.

The

S&P 500

was up 22 to 1245. The

Russell 2000

was up 7 to 405.

The 30-year Treasury bond was up 14/32 to 98 24/32, yielding 5.34%.

On the

New York Stock Exchange

, advancers were beating decliners 1,658 to 1,237 on 622 million shares. On the

Nasdaq Stock Market

winners were beating losers 2,194 to 1,632 on 756 million shares.

On the NYSE, 82 issues had set new 52-week lows while 17 had touched new highs. On the Nasdaq, 57 issues had set new lows while new highs totaled 29.

On the Big Board,

Philip Morris

(MO) - Get Report

was most active with 20 million shares changing hands. It was down 1 to 40 7/16. The stock fell on news that a San Francisco jury Wednesday awarded $50 million in punitive damages to a longtime smoker, assessing the damages against the company. The

American Stock Exchange Tobacco Index

was down 1%.

On the Nasdaq,

Prodigy

(PRGY)

, which has made its trading debut today, was most active on volume of 23 million shares. It was up 12 3/4, or 85%, to 27 7/3.

2:03 p.m.: Tech, Financials Continue to Lead Climb

Technology and financial stocks leapt and were leading the market sharply higher this afternoon as the lately troubled Internet stocks regained their footing and blasted off.

The

Nasdaq Composite Index

was up 63, or 2%, to 2373.

TheStreet.com Internet Sector

was up 38 to 489.

TheStreet.com E-Commerce Index

was up 9 to 103.

More on the financials below.

Meanwhile, a couple of Internet newcomers were soaring on their first day of trading. Internet services provider

Prodigy

(PRGY)

was up 13 3/16, or 88%, to 28 1/4, while

VerticalNet

(VERT)

surged 33, or 205%, to 49. VerticalNet owns and operates 33 industry-specific communities of commerce on the Internet.

On the Nasdaq, Prodigy was most active on volume of 21 million shares.

Elsewhere, the

Dow Jones Industrial Average

was up 100 to 9277.

Philip Morris

(MO) - Get Report

, a Dow component, was down 13/16 to 40 5/8 on news that a San Francisco jury Wednesday awarded $50 million in punitive damages to a longtime smoker, assessing the damages against the company. Earlier, the stock did manage to climb into positive territory, but has since slipped. On the Big Board, Philip Morris was most active with 19 million shares changing hands.

The

American Stock Exchange Tobacco Index

was down 1%.

The

S&P 500

was up 20 to 1244. The

Russell 2000

was up 7 to 405.

The 30-year Treasury bond was up 10/32 to 98 19/32, yielding 5.344%.

On the

New York Stock Exchange

, advancers were beating decliners 1,681 to 1,131 on 527 million shares. On the

Nasdaq Stock Market

winners were beating losers 2,160 to 1,531 on 634 million shares.

On the NYSE, 71 issues had set new 52-week lows while 15 had touched new highs. On the Nasdaq, 50 issues had set new lows while new highs totaled 26.

Sector Focus: Financial Services

Bank, brokerage and insurance stocks were flying thanks to testimony from

Federal Reserve

Chairman

Alan Greenspan

, who reaffirmed his support for financial services reform legislation in an appearance before the

House Banking Committee

.

The legislation, H.R. 10, would remove obstacles to the integration of banking, insurance and brokerage businesses. Among other things, the proposed legislation would repeal the

Glass-Steagall Act's

prohibitions on banks affiliating with securities firms and would permit holding companies to underwrite and deal securities, as well as sponsor and distribute mutual funds. The bill would also allow holding companies to underwrite and broker any insurance product.

"There is virtual unanimity among all concerned -- private and public alike -- that these barriers should be removed," the Fed chief said.

1:04 p.m.: Midday Musings Market Gets Back to Business with Tech-Led Rally

12:04 p.m.: Internet Stocks Soar

Internet stocks were skyrocketing, led by

CNet

(CNET) - Get Report

, as the tech-laden

Nasdaq Composite Index

was up 3%.

TheStreet.com Internet Sector

was up 39 to 490.

TheStreet.com E-Commerce Index

was up 9 to 103. The

The Nasdaq Comp was up 60 to 2370.

CNet was up 18 3/4, or 21%, to 110 1/2, after yesterday declaring a 2-for-1 stock split and posting earnings of 18 cents a share, 8 cents higher than the

First Call

11-analyst outlook and above the year-ago loss of 62 cents.

Elsewhere, the

Dow Jones Industrial Average

was up 64 to 9241. Dow component

Philip Morris

(MO) - Get Report

was up 3/16 to 41 5/8 in the face of news that a San Francisco jury Wednesday awarded $50 million in punitive damages to a longtime smoker, assessing the damages against the company.

The

S&P 500

was up 17 to 1241. The

Russell 2000

was up 6 to 404.

The 30-year Treasury bond was down 1/32 at 98 9/32, yielding 5.368%. (For more on the fixed-income market, see today's early

Bond Focus.)

Meanwhile, financials were flying on testimony from

Federal Reserve

Chairman

Alan Greenspan

. The chairman, in testimony before the

House Banking Committee

, reaffirmed support for legislation to remove barriers to the integration of banking, insurance and brokerage activities.

"There is virtual unanimity among all concerned -- private and public alike -- that these barriers should be removed," the Fed chief said.

The

Philadelphia Stock Exchange/KBW Bank Index

was up 2%, while the

American Stock Exchange Broker/Dealer Index

surged 5%.

Forest and paper product stocks tumbled. The

Philadelphia Stock Exchange Forest and Paper Product Index

was down 2%.

On the

New York Stock Exchange

, advancers were beating decliners 1,621 to 1,075 on 345 million shares. On the

Nasdaq Stock Market

winners were beating losers 2,007 to 1,356 on 413 million shares.

On the NYSE, 56 issues had set new 52-week lows while 13 had touched new highs. On the Nasdaq, 34 issues had set new lows while new highs totaled 21.

On the Big Board, Philip Morris was most active with 15 million shares changing hands.

On the Nasdaq,

Dell

(DELL) - Get Report

was most active on volume of 12 million shares. It was up 3 3/8 to 100 5/8.

Tech Focus

Among some of the tech indices, the

Philadelphia Stock Exchange Semiconductor Index

was up 5%, the

Philadelphia Stock Exchange Computer Box Maker Index

was up 3%. The Morgan Stanley High-Tech 35 was up 4%. The Nasdaq 100 was up 3%.

Lycos

(LCOS)

, which has been battered in the wake of the announcement of its deal with

USA Networks

(USAI) - Get Report

, rebounded today. Lycos was up 16, or 19%, to 104.

Hambrecht & Quist

upgraded Lycos to strong buy from buy. Yesterday, Lycos was downgraded by several firms.

In the Newsletters

Sun Microsystems

(SUNW) - Get Report

is working on a dual strategy to integrate

Netscape's

(NSCP)

application server into its current product line, according to an article in the latest issue of

Computer Reseller News

.

The article said the company is creating a

Java

-based, cross-platform version of

Netscape Application Server

, formerly the

Kiva

application server, sources close to Sun's plans said. Also, the company plans to port NAS to additional platforms, the article stated.

Computer Associates

(CA) - Get Report

hopes to strengthen its electronic-commerce capabilities with a new release of its enterprise

Web Management Option

, according to an article in

Computer Reseller News

. The product is an add-on to the company's

Unicenter TNG

framework, and monitors Web-site performance by looking at various aspects of Web-based business applications, the article said.

11:09 a.m.: Tech Stocks Continue to Lead Market Higher

The tech sector was leading the market higher, with the

Nasdaq Composite Index

up 2%, while the prepared text of

Federal Reserve

Chairman

Alan Greenspan's

testimony mentioned nothing about the outlook for the economy or interest rates.

The Nasdaq Comp was up 41 to 2351.

In his prepared remarks before the

House Banking Committee

, Greenspan reiterated his support for legislation to overhaul old banking laws. Bank and brokerage stocks were soaring. The

Philadelphia Stock Exchange/KBW Bank Index

was up 1%, while the

American Stock Exchange Broker/Dealer Index

surged 4%.

Elsewhere, the

Dow Jones Industrial Average

was up 6 to 9184. Dow component

Philip Morris

(MO) - Get Report

was down 7/8 to 40 9/16. The stock fell on news that a San Francisco jury Wednesday awarded $50 million in punitive damages to a longtime smoker, assessing the damages against the company.

The

S&P 500

was up 9 to 1232. The

Russell 2000

was up 4 to 402. The small-cap proxy was the largest percentage loser among the major market indices yesterday, falling 1.3%.

TheStreet.com Internet Sector

was up 32 to 483.

TheStreet.com E-Commerce Index

was up 7 to 101.

The 30-year Treasury bond was down 1/32 to 98 9/32, yielding 5.37%.

A couple of stocks this morning have made their trading debuts, including the stock of

Gabelli Asset Management

(GBL) - Get Report

, which was up 1/2 to 18. Its 6 million-share IPO priced within range Wednesday at $17.50 a share by

Salomon Smith Barney

. (

TheStreet.com

wrote about the offering

last night.)

Also making its trading debut today,

Korn/Ferry

(KFY) - Get Report

was down 7/16, or 3%, to 13 9/16.

On the merger-and-acquisition front,

Federated Department Stores

(FD)

fell 2 /16 to 40 7/16 on news it is buying

Fingerhut

(FHT)

, a direct marketing company. Fingerhut, meanwhile, spiked 5 11/16, or 30%, to 24 1/2.

Under the deal, Fingerhut shareholders will receive $25 per share in cash under a tender offer expected to commence within a week. The deal is valued at about $1.7 billion, which includes Fingerhut debt. The transaction has been approved by the boards of both companies.

9:55 a.m.: Stocks Head Higher Early with Techs Leading

Stocks were mostly higher early on with the

Nasdaq Composite Index

leading the way.

The Nasdaq Comp was up 21 to 2330.

Elsewhere, the

Dow Jones Industrial Average

was down 15 to 9162. The

S&P 500

was up 2 to 1225. The

Russell 2000

was up 3 to 401.

TheStreet.com Internet Sector

was up 16 to 466.

TheStreet.com E-Commerce Index

was up 5 to 99.

The 30-year Treasury bond was down 1/32 to 98 8/32, yielding 5.37%.

Most Up at Open -- NYSE

Vodafone (VOD) - Get Report, up 3 1/4 to 177

.

Most Up at Open -- Nasdaq

CNet (CNET) - Get Report, up 20 15/16 to 112 1/4

: Yesterday the company declared a 2-for-1 stock split and posted earnings of 18 cents a share, 8 cents higher than the

First Call

11-analyst outlook and above the year-ago loss of 62 cents.

Most Down at Open -- NYSE

Policy Management (PMS) , down 2 1/8 to 38 1/4

.

Most Down at Open -- Nasdaq

Ortel (ORTL) , down 1 7/8 to 7 1/8

: The company said yesterday it will post a loss of about 9 cents a share in its fiscal third quarter. The First Call seven-analyst consensus currently sees the company earning 3 cents.