For Net Stocks, It's More Pain, Different Day

AOL slides further after Qwest offers free Net access for long-distance customers.
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Same old story for Internet stocks -- and same old results.

The Net sector continued to be punished by interest-rate worries, technical factors and a lack of positive news. Last Thursday's rebound appears to have been merely a one-day bounce and not the start of any recovery.

TheStreet.com Internet Sector

index was recently down 19.57, or 4.1%, at 460.46. The DOT closed below a key technical level of 495.17 on Monday, which may be contributing to the pressure on the sector today.

TheStreet.com E-Finance

index was off 3 1/2, or 6%, at 51 25/32, reflecting ongoing concerns about rising interest rates.

Telephone wars were taking their toll on

America Online

(AOL)

today. AOL was getting beat up yet again on news that

Qwest

(QWST)

would offer free Net access for consumers who buy special long-distance calling services. AOL was down 4 3/4, or 5.5%, at 80 13/16.

Qwest said for a flat rate of $24.95 a month, the package features unlimited dial-up Net service and 250 minutes of domestic long-distance calling service. The move comes a day after

MCI WorldCom

(WCOM)

cut evening, overnight and weekend calling rates to as low as 5 cents a minute. Qwest was down 5/16, or 1%, at 25 15/16.

Today's was the latest hit in a string of setbacks for AOL. The stock was hurt last month on

rumors that

AT&T

(T) - Get Report

was looking to take on AOL by offering low-priced Internet access. In addition, AOL has been hurt by free Internet access in parts of Europe, something that AOL is offering in the U.K. Also, the company has been hurt by the move toward high-speed Internet access.

There also was no relief for

Excite@Home

(ATHM) - Get Report

, which fell 12% on Monday on a report that AT&T was considering a plan to allow AOL to use AT&T cable lines for high-speed Internet access. AT&T denied the story and pledged its commitment to its deal with Excite@Home, but the stock continued to drop. It was off 4 3/16, or 11%, at 33 13/16.

Downgrades in both

E*Trade

(EGRP)

and

Net.B@nk

(NTBK)

were contributing to weakness among e-finance stocks.

Raymond James

downgraded both stocks to neutral from buy. E*Trade was off 2 1/8, or 9%, at 21 13/16, and Net.B@nk was down 1 3/16, or 6%, at 18 1/8.

Despite ongoing weakness in the marketplace, a couple of Net companies were making their debuts today, but early returns were not too impressive.

US Interactive

(USIT)

, which provides Internet strategy consulting, marketing and technical services, was up 1/16, at 10 1/16.

HotJobs.com

(HOTJ)

, an online job recruiter, was down 1/4, or 3%, at 7 3/4.