SAN FRANCISCO -- There were no red flags from Fed Chairman Alan Greenspan's testimony to the Senate banking committee today, giving Internet investors the green light to buy.
TheStreet.com Internet Sector
index closed up 13.51, or 2.4%, at 584.32, with much of the gains coming after Greenspan spoke to senators. His prepared testimony to the Senate banking committee was the same one he delivered to the House last week. But the question-and-answer session did not reveal much new about the central bank's attitudes toward inflation, which was the source of last week's
Without another warning shot, traders were encouraged to buy, prompting some short-covering in many of the Internet bellwethers that have been among the weaker Net plays of late. Gains did not get overly extended with the market still in a seasonally weak period and losses over the past week still disconcerting some investors.
Among the big winners was
, which closed up 11 11/32, or 15%, at 85. The company said it had entered into an agreement with
that will allow AutoNation to sell new automobiles to consumers through priceline.com's online vehicle service. Previously, priceline.com's vehicle-purchasing service was available only in the New York metropolitan area.
closed up 4 3/4, or 5%, at 105 3/4 after getting an upgrade from
Dain Rauscher Wessels
to buy-aggressive from neutral. Analyst Mitch Bartlett said the increase was based "purely on valuation." In a note, he wrote that he sees more of a chance for the company to grow into a valuation of around $17 billion than the $30 billion valuation the stock has been at in the past. He noted that Amazon "has enormous upside potential in 1999 fourth-quarter sales," saying 1999 could be "the breakthrough year" for consumers accessing the Net.
Amazon also benefited from its investment in today's hot IPO,
(DSCM:Nasdaq). Shares of the online drugstore closed up 32 1/4, or 179%, at 50 1/4.
Also among Net bellwethers,
posted a strong day, closing up 11 11/16, or 9%, at 143. The company said that it was entering an agreement with
that gives users of
online access to their Telebanc account information. Telebanc ended up 2 3/4, or 9%, at 32 9/16.
One of the weaker performers on the day was
, which closed down 4 3/4, or 12%, at 35 1/2. The Internet service provider reported earnings of 11 cents a share -- beating Street estimates by 2 cents but said it was planning on spending between $45 million and $55 million more than it had originally planned on sales and marketing expenditures.
MindSpring was downgraded by
to underperform from hold following the report. Analyst F. Drake Johnstone told
that MindSpring's subscriber growth was "anemic" and the company would be facing more intense competition for subscribers in the coming months. MindSpring said it increased its customer base by around 71,000 in the quarter to 1.23 million customers, but hopes that the increased expenditures will allow it to reach 2 million subscribers by the middle of next year.
MindSpring's woes also took a toll on rival
, which closed down 2 3/8, or 4%, at 52 1/2.