SAN FRANCISCO -- As the temperature soared in New York today, so too did the Nasdaq and Internet stocks.
The Nasdaq closed up 46 points, or 2%, at 2524, while
TheStreet.com Internet Sector
index closed up 32.41, or 6%, at 585.87. Though there was no single spark that set the sector on fire, its intensity grew as the day progressed.
Tony Dwyer, market strategist with
, says the tech sector was seeing a bounce from oversold conditions along with short-covering, though he does not think it will be a long-lasting bounce.
"I think it will run out of steam sometime this week," he says.
Dwyer says there will come a point where investors that didn't get out during the panic selling over the past couple of weeks will take advantage of the bounce to cut their losses. The specter of a
interest-rate hike remains, he says, and the market still faces a number of important economic reports this
week. Preannouncement season is also approaching, he adds, and those factors could work against a long-lasting recovery.
"Things had gotten so beat up and so negative, it was overdue for a bounce," he says.
Among the best performers were those Net stocks considered bellwethers, many of which have been downtrodden lately.
closed up 11 3/16, or 12%, at 101 1/2
closed up 14 3/4, or 9%, at 183 1/4, while
closed up 13, or 14%, at 107 1/4.
Also on the rise was
, which closed up 9 17/32, or 11%, at 99 13/32. Gains came on speculation that the search and network technology company will announce its fourth new product next week.
A late participant in the rally was
. The high-speed Internet service provider saw follow-through selling early in the day from Friday's court
ruling in Oregon that requires
to open its high-speed cable networks to competing Internet access providers in the Portland area. Excite@Home is controlled by AT&T, and its stock valuation is largely based on the exclusive rights it owns to offer high-speed Internet access through its cable company partners.
Excite@Home traded to a low of 87 early in the day. There still is much uncertainty over whether the ruling will be overturned on appeal or whether it will set an influential precedent. That uncertainty allowed Excite@Home to bounce back and close up 9 1/4, or 10%, at 103 3/4.
In a research note today,
Credit Suisse First Boston
analyst Kristen Koh wrote that, even if the open access requirement were to become a national issue, the ruling "in and of itself does not affect Excite@Home, since the exclusive contracts with its cable parents are likely to expire (2002) before the legal procedures, technical investments and economic negotiations run their course."
, which was made out to be a winner following the ruling and closed up 10 3/4 points on Friday, dropped 3, or 2.5%, to 115 today.
"We believe -- as has always been the case -- that the parties involved are likely to come to an economic agreement (quickly grow a gigantic pie and split it) rather than give control to the federal courts/agencies for a process likely to span many years," wrote Koh.
Two other ISPs seen as winners on Friday also fell today.
closed down 5 1/16, or 8%, at 53 15/16 after gaining 8 points on Friday, while
closed down 4 1/4, or 5%, at 75 1/16 after gaining 14 points on Friday.