Less-Than-Enthusiastic Net Sector Meandering Into the Weekend

Despite a stagnant market, IPOs such as Agile Software and LookSmart have been strong.
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Internet stocks seemed content to meander into the weekend. The sector was holding gains from early in the session but wasn't generating much upside enthusiasm.

TheStreet.com Internet Sector

index was up 4.68, or 0.9%, at 553.82 in recent trading. The DOT appears set to close above last Friday's settlement of 528.40, though it doesn't look as though it will challenge the high for the week of 580.33 made Thursday.

While much of the market was stagnant, initial public offerings were strong.

LookSmart

(LOOK)

, an Internet directory company, was up 6 3/8, or 53%, at 18 3/8. Also,

MyPoints.com

(MYPT)

, an online consumer reward-based marketing firm, was up 6 1/4, or 78%, at 14 1/4.

Agile Software

(AGIL)

, which provides content-management software, was the top performer among the IPOs, up 23 3/8, or 111%, at 44 3/8.

Elsewhere, shares of

eBay

(EBAY) - Get Report

were up 4 5/16, or 4%, at 118 1/16. On Thursday, the online auctioneer said it had entered into an agreement with Net retailer

Buy.com

to feature direct links to eBay at the Buy.com Web site. Privately held Buy.com is an online superstore, selling computer hardware, software and PC games, music and books.

Also on the rise was

China.com

(CHINA)

, up 3 1/8, or 10%, at 35 1/8 after the company reported a profit in its second quarter and that it was looking to add some strategic partners. The company also reported a profit of $1.9 million for its second quarter, including a one-time gain and goodwill amortization of $4.1 million. Excluding those extraordinary items, the company reported a net loss of $2.2 million. China.com's average daily page views for July increased to 1.3 million, a 30% increase over average page views of 1 million a day in June.

Books-a-Million

(BAMM)

has climbed since releasing its earnings results on Thursday. It was up 3/4, or 7%, at 10 13/16 in recent trading. The company reported flat earnings for its second quarter vs. the three-cent loss estimate expected from

First Call

. It said sales rose 15% to $89.9 million from $78 million a year ago.

In his weekly Web report,

BancBoston Robertson Stephens

Internet analyst Keith Benjamin reiterated what many in the business have been saying, that interest in the sector will be picking up in the coming weeks.

"We believe there is a lot of money waiting to buy these stocks, but wavering after this year's volatility," he wrote. "In our conversations with investors, we continue to field the same questions of what and when to buy, but not if they should buy Internet stocks. This suggests to us that we will see a rush to buy within the next few weeks, just as we saw around this time last year."

Also in the report, Robertson Stephens' e-tail analyst Lauren Levitan wrote an upbeat peace on online shopping growth after seeing July data from

Media Metrix

. Shopping growth outpaced overall Web usage growth in July, with unique visits to shopping sites increasing by 2% to 42.6 million unique users vs. overall unique visitor growth of 0.4% to 62.9 million users.

Levitan noted that shopping penetration of overall Web usage hit a new high of 67.8% (up from 66.7% in June), which she said "clearly indicates to us that shopping is one of the primary reasons people access the Web." Levitan wrote that she expected shopping usage to slow during the summer months, so the continued momentum of online shopping was "extremely positive and another indication of a potentially huge online holiday shopping season to come."

Finally, some negative news from Robbie Stephens' e-brokerage analyst Scott Appleby, who noted that after jumping 30.4% in the first week of August,

internetstocks.com's

Netdex volumes dropped 27.7% to 692 million shares from 957 million shares traded, the second lowest volume total for the year. He wrote that continued weakness in the market and uncertainty regarding interest rates were to blame for the decline, though the "seasonal trough that is normal for this time appears to be deeper than many of us had originally expected." Earlier this week, Appleby lowered his estimate for sequential transaction growth for the e-broker industry in the third quarter to flat to negative 5% from 3% to 5%.