Skip to main content

Net Sector Breaks Out of Tense Slump

Nasdaq, Net bellwethers finish higher, buoyed by Merrill Lynch rumors.

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. Internet Sector

index closed up 32.94, or 5.3%, at 650.68.

One possible catalyst was a rumor reported by


that Merrill Lynch was creating a unit trust of 20 Internet stocks for retail distribution that included

America Online



(AMZN) - Get Inc. Report





Scroll to Continue

TheStreet Recommends


(EBAY) - Get eBay Inc. Report


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.



, 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


, 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.



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.


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


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

rumor page indicated


(MSFT) - Get Microsoft Corporation Report

would buy the Internet service provider for $45 a share.

Three IPOs that debuted also turned in stellar results.



, 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


, which develops electronic mail management software, ended up 36 1/2, or 243%, at 51 1/2. And

Broadbase Software


which provides software used to enhance customer targeting and acquisition efforts, closed up 13 1/4, or 95%, at 27 1/4.