Stocks Near Their Session Lows

The Internet sector continues to get hit hard.
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Internet stocks were getting pummeled, as the major market averages recently skidded to the neighborhood of their intraday lows.

TheStreet.com Internet Sector

index was down 35 to 470.

TheStreet.com E-Commerce Index

was down 7 to 95.

The

Nasdaq Composite Index

was down 56 to 2349. The

Dow Jones Industrial Average

was down 85 to 9206. The

S&P 500

was down 17 to 1227. The

Russell 2000

was down 6 to 405.

Turning to Treasuries, the 30-year bond was up 8/32 to 98 29/32, yielding 5.33%.

News that

USA Networks

(USAI) - Get Report

was acquiring

Lycos

(LCOS)

and merging it with USA Networks' e-commerce and Internet assets met with disdain for Lycos' stock and a warm greeting for USA Networks. Lycos was down 26 1/8, or 20%, to 101 1/2, while USA Networks has added 4 3/8, or 12%, to 42 1/4.

Elsewhere on the e-commerce front,

Nike

(NKE) - Get Report

said it has begun selling some of its footwear and apparel online. The news sent the stock up off the bottom and into positive territory. It was lately up 3/4 to 51 3/4. It had traded as low as 49 11/16. On

Feb. 1,

TheStreet.com

profiled the company and reported it would unveil its e-commerce effort within the next 10 days.

On the

New York Stock Exchange

, decliners were beating advancers 1,853 to 993 on 464 million shares. On the

Nasdaq Stock Market

losers were beating winners 2,640 to 1,146 on 609 million shares.

On the NYSE, 65 issues had set new 52-week lows while 9 had touched new highs. On the Nasdaq, 53 issues had set new lows while new highs totaled 29.

On the Big Board,

America Online

(CPQ)

was most active, with 13 million shares changing hands. It was down 8 3/4 to 150 9/16.

On the Nasdaq,

Dell

(DELL) - Get Report

was most active, with 18 million shares changing hands. It was down 2 9/16 to 101 7/16.

Focus: Off The Top

In light of the market's latest rough patch which began in earnest last Thursday, and in the wake of near-term trouble for the market going forward, just think, it wasn't too long ago that some of the market's major indices were closing at all-time highs.

For example, as recently as Feb. 1, the Nasdaq Comp enjoyed its all-time closing high when it ended at 2510.09. As of approximately 1:30 p.m. EST, it had fallen about 6.6%.

As for the S&P 500, its record closing peak was set on Jan. 29 when it closed at 1279.64. It had tumbled about 4.4% as of 1:30 p.m. EST.

On Jan. 8, the Dow closed at an all-time high of 9643.32. As of 1:30 p.m., EST, the Dow had fallen roughly 4.8%.

12:51: Midday Musings: Factors Converge to Slam Stocks Lower

11:58 a.m.: Tech Stocks Continue to Falter

Today was the day that the

Goldman Sachs

technology conference was supposed to save the market.

Michael Dell

would step up to the dais at 10 a.m. or so, waft some incense toward the parishioners, and tech stocks would fly.

So while everyone is talking about how the terms of

USA Networks

(USAI) - Get Report

takeout of

Lycos

(LCOS)

, with its meager premium, is taking tech stocks lower, let's not forget what's not taking them up: the 100% surefire, never fails

Goldman Sachs' 13th Annual Technology Investment Symposium

.

There is always heady anticipation for the annual fete. With good reason -- tech stocks generally move higher while the confab is going on. Those gains may yet come. But anyone who bought stock ahead of the conference with a mind toward instant gratification has not gotten it. The Lycos news disappointed the market, but it is just as disappointing that its shining knight did not ride to the rescue. Hence the selling.

The

Dow Jones Industrial Average

was lately down 92 to 9199. The broader

S&P 500

was down 17 to 1227. The tech-heavy

Nasdaq Composite

index was off 58 to 2347, while

TheStreet.com Internet Sector Index

was down 41 to 463. The small cap

Russell 2000

was down 6 to 405.

Still, Wall Streeters, accustomed to the sea-sawing market took a sanguine view of the selling.

"We're just in this corrective phase," said Bryan Piskorowski, market analyst at

Prudential Securities

. "At Pru we stand bullish in the long term and sketchy in the near term. This is nothing new, this is healthy. What goes up must pause before it goes up again."

10:56 a.m.: Lycos Deal Sends Stocks Lower

It's a rare day when a takeover announcement is the thing that lays the market low. But the news that

USA Networks

(USAI) - Get Report

would take out

Lycos

(LCOS)

has done exactly that.

The problem with the Lycos deal is a strange one. In usual terms, the deal is not such a bad one -- Lycos shareholders will receive about a 2% premium on Lycos' Monday closing price. But Lycos is an Internet company, so the usual terms do not apply. There is incredible risk inherent in Internet stock valuations, and the only reason investors were willing to take on that risk is the possibility that these stocks could go higher still.

"The reason people are able to stomach the tremendous risk in these is they might double in the next month," said Dan Mathisson, head stock trader at

D.E. Shaw Securities

. "You take away the upside and there's no reason to be in them."

And so the Lycos deal set off a domino chain.

"Lycos went down and that brought down

Yahoo!

(YHOO)

and

Amazon

(AMZN) - Get Report

and

AOL

(AMZN) - Get Report

, and then the stocks that were up yesterday came down," said Mathisson. "We're seeing the whole thing get hit."

The

Dow Jones Industrial Average

was lately down 73 to 9218. The broader

S&P 500

was down 15 to 1229. The tech-heavy

Nasdaq Composite

index was off 48 to 2357, while

TheStreet.com Internet Sector Index

was down 26 to 479. The small cap

Russell 2000

was down 4 to 408.

9:58 a.m.: Stocks Fall Slightly at Open

Stocks were slightly softer after

Monday's mixed session.

USA Networks

(USAI) - Get Report

agreed to buy

Lycos

(LCOS)

. Lycos will be merged with USA Networks' e-commerce and Internet assets.

The

Dow Jones Industrial Average

was down 24 to 9267. The

S&P 500

was down 3 to 1241. The

Nasdaq Composite Index

was down 3 to 2402. The

Russell 2000

was down 1 to 2402.

TheStreet.com Internet Sector

was down 14 to 491. Meanwhile,

TheStreet.com E-Commerce Index

was down 4 to 98.

The 30-year Treasury bond was up 17/32 to 99 5/32, yielding 5.31%.

Most Up at Open -- NYSE

Hewlett Packard (HWP) , up 3 to 74 7/8

:

Most Up at Open -- Nasdaq

USA Networks (USAI) - Get Report, up 6 11/16 to 44 5/8

.

Most Down at Open -- NYSE

DaimlerChrysler (DCX) , down 3 1/8 to 95 3/8

:

Most Down at Open -- Nasdaq

Lycos (LCOS) , down 13 1/2 to 113 3/4

.