The Night Watch: AOL Deal Reverberates in After-Hours Trading

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The

megamerger looked like a pretty good deal, at least to the late-night lurkers out there.

America Online

(AOL)

was firmer during after-hours trading on

Instinet

ECN. As of 6 p.m. EST, AOL traded at 72 3/8, a 1 3/8 improvement from its New York close of 71.

The AOL composite close, which takes into account activity on still-open exchanges in western locales, was 72 5/8, up 1 5/8 from the New York close, as of 6:29 p.m.

Time Warner

(TWX)

was also stronger, last trading at 92 as of 5:58 p.m. This represents a 1 1/2 point gain over its New York close of 90 1/2. Time Warner's composite close was 92 1/1 at 6:20 p.m.

Other than the

Brando

-sized movement in

HealthCentral.com

(HCEN)

, the rest of Island's after-hours book was a bit lighter than usual. Penny-stock speculators and tech buyers continued to fill Island's dance card.

Compuware

(CPWR)

made a particularly notable move at the No. 4 spot. The company rose 5 61/64 to 29 1/4 on moderate volume. After the bell, the computer services company announced that its third quarter would beat or meet the

First Call/Thomson Financial

estimate of 33 cents a share. Additionally, the company announced that its third-quarter revenue would be between $620 and $633 million.

The resultant gain is good news for the Michigan-based company, which dropped 5 points, or 17.7%, to 23 5/16, as investors grew jittery, selling heavily into the closing bell. The day-session loss typifies Compuware's new year. So far, it's off 36% in 2000.

Tech names fared pretty well in the wake of the mammoth AOL-Time Warner announcement.

Qualcomm

(QCOM) - Get Report

gained 1/2 to 160.

JDS Uniphase

(JDSU)

gained 5 3/4 to 206.

Dell

(DELL) - Get Report

rose 3/8 to 44 3/8.

Excite@Home

(ATHM) - Get Report

rose 5/8 to 40 3/4.

BMC Software

(BMCS)

rose 1/4 to 46 3/16.

Yahoo!

(YHOO)

was the only notable loser, dropping 2 13/16 to 433 1/4.

Why do certain companies move in after-hours trading? Well, it's like Christina Aguilera breathlessly chirps in her hit "Genie in a Bottle."

You gotta rub me the right way.

A fitting example of a good rub was the aforementioned HealthCentral.com, which lurked at the top of

Island

ECN's most-actives list, up 15/16 to 14 5/8. HealthCentral.com announced that it will provide e-newsletters to subscribers of

Microsoft's

(MSFT) - Get Report

Hotmail service on the Microsoft Network. The deal stipulates that HealthCentral.com's content is guaranteed to reach 2 million MSN subscribers.

The MSN deal was immediately chased by a second announcement, which extended HealthCentral.com's shiatsu for a few more minutes. The company announced that it struck a deal with fitness guru

Covert Bailey

, who is probably best-known (if at all) for his

Fit or Fat

book series, which sold 6 million copies.

Now, were either of these deals earth shattering?

Nope. These announcements weren't

AOL big, but the important thing to note was the attention they attract to the stock. Clearly, the rub HealthCenter.com gets from Microsoft is positive and more worthwhile than the Covert Bailey bit. The Web content provider is legitimated after landing a big account from one of America's best-known companies. Meanwhile, the company gets some editorial backup from Bailey, using his name to sell the company further.

Again, these weren't market-moving announcements, but the rub they gave a stock mired in the teens is rather remarkable. Since its IPO on Dec. 7, HeathCentral.com exceeded day-session volume of a million shares on seven days. Four of those occurred within its first four days on the public market. Mid to low six-figure volume is the norm for this company, which traded on 287,000 shares yesterday. Today the company traded on 6.5 million shares, with huge movement in the last two hours of trading as the news began spreading. It ended the day up 4, or 41.6%, to a record close of 13 11/15.

Another company popped huge on a pair of late-night press releases.

Genicom

(GECM)

announced the creation of the first laser printer that can turn out more than 28 pages per minute. The company followed this minor bit of flakking with another announcement that it would be supplying laser printers to

Start Computer Group

, which will put Genicom's printers into the potentially lucrative Chinese market.

As a result of the good news, Genicom was last up 3 19/32 to 4 1/2 on 650,000 shares.

Island ECN, owned by Datek Online, offers trading, mainly in Nasdaq-listed stocks, from 8 a.m. to 8 p.m. EST.

.

MarketXT, formerly Eclipse Trading, offers after-hours trading to retail clients of Morgan Stanley Dean Witter's (MWD) Morgan Stanley Dean Witter Online, Mellon Bank's (MEL) Dreyfus Brokerage Services and clients of Salomon Smith Barney. Clients can trade 200 of the most actively traded New York Stock Exchange and Nasdaq Stock Market issues, 4:30 p.m. to 8 p.m. EST Monday through Thursday.

Confused?

TheStreet.com

explains how the rules change when the sun goes down in Investing Basics: Night Owl, a section devoted to after-hours trading.