SAN FRANCISCO -- They're back!
Internet stocks, that is. Ease interest-rate worries and the Net sector gets back in favor with investors.
Barry Hyman, senior market analyst with
Ehrenkratz King Nussbaum
, said the tame
Consumer Price Index
report this morning "takes away some of the valuation concerns" among Internet stocks. Hyman said he believes the worst is over, particularly if the inflation numbers limit the Fed to one interest-rate hike.
"I think you've seen the bottom of this move, at least from an interest-rate perspective and an oversold perspective," he told
Hyman said margin-related selling in the sector on Monday looked "climactic," perhaps marking the end of the recent decline. But Hyman warned that investors in Net stocks looking for the old days of triple-digit returns in a short period of time need to scale back expectations. He said what is different now is that there are other sectors of the market that are also hot and investors do not have to rush to high-risk Net stocks to get good returns.
"We're at the beginning of a decent short-term rally, but I don't expect the same exaggerated action we've seen in the past," he said, suggesting investors stick to the larger-cap Internet names.
Larger-cap names were faring well, as were smaller Net names.
TheStreet.com Internet Sector
index was up 37, or 7%, at 541.08.
Among the big names,
was up 14 3/8, or 11.5%, at 139 5/8;
was up 10 1/4, or 11%, at 106 3/4 and
was up 10 1/4, or 11%, at 105.
unveiled new search engine technology on Tuesday, was up 17 7/8, or 19%, at 108 3/8.
Even some Net companies that have been out of favor were faring well.
was up 10 1/16, or 7%, at 145 9/16, while
was up 9 1/16, or 11%, at 89 1/8.
And it turned out to be a perfect day for
(CARI:Nasdaq) to go public. The Internet-based healthcare and e-commerce company was up 14 1/4, or 79%, at 32 1/4 in its first day of trading.
Gains were not limited to the Internet sector.
continued to bask in the glow of its earnings report, which bested estimates by 4 cents. It was trading up 6 7/8, or 27%, at 32.
was up 3 5/16, or 6%, at 59, while
was up 3, or 7%, at 46 1/4.