Net Issues Struggle to Shake Thursday Slump

One analyst says the investor numbness to positive news in the sector may result from expectations for a slow August.
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SAN FRANCISCO -- The Internet sector is certainly looking to put Thursday's dismal performance behind it this morning, though it was having difficulty making much progress to that end early on. Internet Sector

index was down 0.71 to 561.73 in recent trading, giving back its early gains. High volatility and sharp losses seen during earnings season have kept many buyers sidelined, and ongoing weakness in Treasuries was contributing to the malaise.

In his just-released weekly Web report,

BancBoston Robertson Stephens

analyst Keith Benjamin said that Net investors "seem numb" to any news in the sector, perhaps in anticipation of a slow August. But Benjamin said that he does not expect the sector to deteriorate.

"With stocks generally far below highs, we expect more inactivity than much further erosion," he wrote. "Still, we think the best strategy for a few weeks might be to do nothing."

The sector to a large extent has taken its cue from the industry bellwethers, and those stocks were somewhat lethargic early today.

America Online


was up 1/4 at 99,



was up 1 1/8 at 138 1/8 and

(AMZN) - Get Report

was down 3/4 at 100 13/16

Earnings season is winding down, but a few companies that reported on Thursday were on the move today.

Modem Media Poppe Tyson


was up 5 7/16, or 26%, at 26 11/16 after soundly beating earnings estimates. The online advertising agency reported earnings of 5 cents a share, much stronger than the 6-cent loss estimate and an 11-cent loss a year ago. Revenue was $16 million compared to $10.4 million last year. Following the report,

Bear Stearns

upgraded Modem Media to buy from attractive and BancBoston Robertson Stephens upgraded it to strong buy from buy.


was up 1 5/8, or 9%, at 19 3/8 after beating its consensus estimate. The online automobile seller reported a loss of 33 cents a share for the second quarter, 7 cents better than the

First Call

estimate. Revenue of $9.2 million compared to $5.4 million in the second quarter of last year.

AboveNet Communications


was little changed despite missing estimates for its fiscal fourth quarter. The supplier of managed Internet services reported a loss of 38 cents a share, much worse than the 29-cent First Call estimate. It compares with a year-earlier loss of 22 cents a share. Revenue of $5.7 million compares to sales of $1.4 million a year ago. Shares of the company down 1/8 at 33 11/16 lately.