B2B Stocks Bouncing Higher Again on Raft of Good News

Economic data and a key upgrade lift the stocks, though the movement owes more to momentum than fundamentals.
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After a couple days of jitters, momentum returned to B2B stocks Thursday, thanks to friendly economic data, a rebound in tech stocks and an upgrade of

Oracle

(ORCL) - Get Report

.

For instance, B2B stalwarts

Ariba

(ARBA)

and

Commerce One

(CMRC)

were both climbing.

Ariba is expected to benefit from a

new deal between

webMethods

(WEBM)

and

Electronic Data Systems

(EDS)

that will help plug large suppliers into its network of businesses on the Internet. And Commerce One late Wednesday announced a joint deal with

SAP

(SAP) - Get Report

to power a private electronic marketplace for

Cable & Wireless

(CWP)

. A private marketplace is a place on the Internet where a company can do business with its own customers and suppliers, away from the prying eyes of its competitors.

Ariba was up $9.50, or 6.5%, at $156.50 just before lunch. Commerce One was up $3.63, or 5.4%, at $7.13.

Great Expectations

The rise in B2B stocks Thursday comes after a brief reprieve among the shares this week. Amid great expectations for third-quarter results, B2B stocks have been on a boom since mid-August. But much of that buying, some analysts think, is based on sheer momentum, not hard-core fundamental buying by investors, which means the shares could fall back if sentiment changes.

One possible indicator will be what happens when the big B2B industry exchanges launch, something that will happen soon. (An exchange is a place where companies go to buy materials and supplies on the Internet.)

Covisint

for the auto industry, for instance, could begin doing business shortly. Those launches could provide a stimulus to push B2B stocks higher. But at the same time, they also could expose flaws in the sector, which of course could hammer the stocks.

But why rain on B2B's parade? For Thursday, at least, the sector acted like there were clear skies ahead.

While the Cable & Wireless deal may have helped boost Commerce One's stock, the company kept investors guessing about how much business it's doing with partner SAP. Last week, Chuck Donchess told

TheStreet.com

that the partners had won four new customers. But Wednesday, a Commerce One spokeswoman wouldn't say whether the Cable & Wireless deal was among those.

In any case, expect more clarity when Commerce One holds its

eLink

conference in Las Vegas next week. (

TSC

will provide extensive coverage.) Commerce One on Thursday also said it completed its acquisition of consulting firm

AppNet

.

Movers

While webMethods was hopping up 6% on its deal with EDS, another big mover in B2B was

PurchasePro.com

(PPRO)

, up 6%. Analysts began to make sense of an announcement Wednesday that it's partnering with big tech firm

Computer Associates

(CA) - Get Report

through a joint development and selling agreement. Not only will that agreement result in smarter software for PurchasePro, but it also puts 3,000 of CA's salespeople on the street beating the PurchasePro drum.

But it may have been what wasn't announced in the deal that was driving the stock Thursday. Dale Boeth, PurchasePro's vice president of strategic development, told

TheStreet.com

Wednesday that the deal also included a global private marketplace for Computer Associates and its suppliers, powered by PurchasePro technology.

But later a company spokesman said that part of the deal wasn't complete. At a presentation at the

Robertson Stephens Internet Conference

in San Francisco last week, PurchasePro executives stressed that they were aggressively targeting private marketplaces. A deal to run a marketplace like that for CA, which is the world's third-largest computer company, would be a major win for PurchasePro.

All of the stocks were benefiting from an upgrade of Oracle to strong buy from influential analyst Chuck Phillips at

Morgan Stanley Dean Witter

. The company is scheduled to report earnings after the market close today. It was up $3.88, or 3.5%, at $84.69. (The firm hasn't done underwriting for Oracle.)

Finally, a tame

Producer Price Index

report today was helping to lift tech stocks in general. The

Merrill Lynch Internet B2B HOLDRs

, a basket of B2B names, was up $2.94, or 5.9%, at $52.81.