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FOMC Focus Returns to Net Sector

But the AltaVista affair was still turning heads this morning.

SAN FRANCISCO -- Internet stocks, along with the rest of the market, are fixated on the Federal Reserve this morning.

The Fed is widely expected to announce a 25-basis-point tightening when its two-day meeting concludes around 2:15 p.m. EDT this afternoon. And while a tightening is anticipated, investors' focus will be on whether the Fed

changes from a tightening bias to a symmetric stance. Internet stocks are

sensitive to changes in interest rates due to the large valuations of many Net companies.

In early trading,

TheStreet.com Internet Sector

index was up a modest 5.01 to 601.58.

CMGI's

(CMGI)

plan to buy 83% of

Compaq's

(CPQ)

AltaVista

Internet unit was generating mostly positive reviews from research houses this morning.

BancBoston Robertson Stephens

noted that the $2.3 billion price tag for AltaVista was "reasonable" and that AltaVista should generate more revenue for CMGI than

Lycos

(LCOS)

would have. In early trading, CMGI was up 4 3/8, or 4%, at 114 11/16; Compaq was unchanged at 23 3/8; and Lycos was off 1 3/16, or 1%, at 93 3/4.

BancBoston Robertson Stephens also painted a positive picture regarding the impact of the deal on

DoubleClick

(DCLK)

. AltaVista is currently DoubleClick's biggest customer, and there was some concern that when their current deal expires in 2001 the AltaVista business would go to CMGI's

Engage

TheStreet Recommends

unit. But BancBoston, which has done underwriting for DoubleClick, said the online advertising firm could end up in a partnership with Engage and may even make up for the lost revenue should it lose AltaVista as a customer. Doubleclick was up 2 1/16, or 2%, at 87 1/4 early on.

Elsewhere among Internet stocks,

eBay

(EBAY) - Get eBay Inc. Report

was lower in early trading, as

CNBC

reported that eBay has had site problems over the past two days (documented on

TheStreet.com

since

Monday). eBay was off 2 3/4, or 2%, at 138.

More Management, Revenue Turmoil for Secure

Just a month after the company said it would trim its product line to focus on e-commerce,

Secure Computing's

(SCUR)

Chairman and CEO Jeff Waxman has resigned effective today, the company announced Tuesday after the markets closed. In addition, the company's second-quarter revenue is expected to fall significantly from previous levels.

The maker of network security products saw its stock slump more than 20% from Tuesday's close of 3. It was recently trading down 11/16, or 23%, at 2 5/16.

On the management side, John McNulty, the company's president and COO, who joined the company this past May, has been elected chairman and appointed CEO effective July 1. Board member Betsy Atkins has also resigned.

On the financial front, total revenue is expected to be between $5.7 million and $6.2 million for the second quarter ended June 30, a decrease of between 57% and 61% from the same quarter a year ago. Products and services revenue is expected to be between $4.7 million and $5.2 million, about 56% to 60% below the $11.8 million reported in the same quarter a year earlier.

The company attributed the decline to continued delays in closing transactions, lengthening of the sales cycle, as well as shifting IT budgets toward Y2K and related issues.

Net loss is expected to be between 42 cents and 49 cents per share before charges of about $12 million primarily related to the

elimination of certain product lines, as well as severance expenses. The

First Call

consensus of analysts had expected a net income of 5 cents per share. Including expenses, the loss for the quarter is expected to be between $1.11 and $1.18 per share.

Secure expects to release its final results for the quarter after the market closes on July 20.

--

Suzanne Galante