SAN FRANCISCO -- Internet stocks were weaker along with the broader market early today, with Net bellwethers leading the way down.
TheStreet.com Internet Sector
index was down 12.29, or 2.1%, at 579.56 in recent trading.
, which made a late recovery Friday after its postearnings slump, was among the hardest hit this morning. It was off 4 9/16, or 4%, at 110 after gaining more than 7 points Friday. The company held an analysts' meeting Friday, and though reports on the meeting were mostly positive, little apparently appeased investors concerned that the company isn't close to turning a profit.
Lise Buyer, analyst at
Credit Suisse First Boston
, noted that the investment story for Amazon is "unchanged." She said the company is looking to provide "superior customer service," and "while the company is racing to put that infrastructure in place, the P&L
profit and loss looks frightening."
Morgan Stanley Dean Witter
analyst Mary Meeker reiterated her outperform rating on the stock after the meeting, writing in a note that Amazon "has a compelling strategy and the right team in place for each segment -- now it's a matter of execution."
Meeker also focused on the future. "A bet on Amazon means, therefore, a bet that Internet retailing is going to be really, really big -- we're sure about this one -- and that Amazon.com is going to be the leading player in Internet retailing -- we're pretty sure about this, but only time will tell," she wrote.
Also among the Net bellwethers,
continued its decline since reporting earnings last week. It recently was down 5 15/16, or 5.5%, at 102.
Its latest losses have been blamed on reports that
, along with other Net companies, are introducing software that can send messages to users of AOL's instant-messaging system. AOL has so far been able to block the access, but the companies are expected to push for industry standards regarding instant messaging.
Microsoft was off 1 9/16, or 1.7%, early on, while Yahoo! was down 5 1/8, or 3.5%, at 140 5/8. Prodigy was off 3/4, or 3%, at 23 1/2.
And in other AOL-related news, the
San Francisco Chronicle
reported today that the San Francisco board of supervisors is expected to vote on whether
should be forced to open its cable TV lines to competitors, like AOL, who want to offer high-speed Internet access to customers. The story noted that a rumored front-running proposal would set a policy in favor of open access, but not force AT&T to open its lines immediately. AT&T has a major stake in
and is poised to give the firm favored distribution on the cable networks it controls. Excite@Home was up 13/16, or 1.8%, at 46 7/8. Excite@Home dropped sharply after a ruling in a similar case went against AT&T in Portland in
, another Internet bellwether, was up slightly ahead of its earnings report. The online auctioneer will report second-quarter earnings after the close. It is expected to report earnings of 3 cents a share, according to
. It was up 2 3/16, or 2%, at 110 in early trading.