Net Sector Breaks Out of Tense Slump
You had the feeling the past couple of days that the Net sector was ready to break out, but was being held back by a tepid stock market. That changed today.
When selling dried up in the broader market and both the Dow and the Nasdaq bounced back, traders embraced Internet stocks.
TheStreet.com Internet Sector
index closed up 32.94, or 5.3%, at 650.68.
One possible catalyst was a rumor reported by
CNBC
that Merrill Lynch was creating a unit trust of 20 Internet stocks for retail distribution that included
America Online
(AOL)
,
Amazon.com
(AMZN) - Get Amazon.com Inc. Report
and
Yahoo!
(YHOO)
and
TheStreet Recommends
eBay
.
And those Net bellwethers were among the best performers. Yahoo! closed up 9 15/16, or 5.9%, at 179 1/2. In a pre-earnings note (Yahoo! reports Oct. 6), Merrill analyst Henry Blodget wrote that he would not be surprised to see Yahoo! beat consensus estimates of 9 cents. AOL closed up 6 1/8, or 7.2%, at 91; Amazon finished up 3 3/4, or 6%, at 66; and eBay ended up 8 1/2, or 6%, at 149 1/8.
Inktomi
(INKT)
, which was in Blodget's "holiday basket" of Internet stocks and would presumably be a part of the 20 stocks, closed up 9 1/16, or 7%, at 138 5/16.
Also among the top performers was
priceline.com
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, which closed up 4 25/32, or 7%, at 71 5/8. The company said it would begin a name-your-own-price for grocery stores in the New York area beginning Nov. 1 and roll out the service nationally next year.
DoubleClick
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finished up 10 3/8, or 9.6%, at 118 7/8.
Salomon Smith Barney
analyst Lanny Baker upped earnings estimates for the company for the second half of 1999 to $126 million from $107 million "to reflect a hearty business tone prevailing in the online advertising market." Salomon has done underwriting for DoubleClick.
Phone.com
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soared 26 1/2 points, or 20%, at 160 7/8. There was no news on the company to account for the move and message boards suggested it was a short squeeze.
MindSpring Enterprises
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may also have benefited from a short squeeze, closing up 6 1/2, or 24.6%, at 32 7/8. There were buyout rumors as well. The
Jagnotes.com
rumor page indicated
Microsoft
(MSFT) - Get Microsoft Corporation Report
would buy the Internet service provider for $45 a share.
Three IPOs that debuted also turned in stellar results.
E.piphany
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, a developer of software that creates analytic profiles of a firm's customer base, closed up 29 3/16, or 182%, at 45 3/16.
Kana Communications
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, which develops electronic mail management software, ended up 36 1/2, or 243%, at 51 1/2. And
Broadbase Software
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which provides software used to enhance customer targeting and acquisition efforts, closed up 13 1/4, or 95%, at 27 1/4.
