The Internet sector appeared poised to rally today but was kept in check as caution reigned ahead of Tuesday's Consumer Price Index report.
TheStreet.com Internet Sector
index closed up 12.71, or 2.4%, at 541.12. The DOT reached a high of 547.47 at around 11:15 a.m. EDT before sellers/profit-takers emerged, though it closed on a strong note.
The sector's caution was probably wise. The Net sector has been sensitive to fluctuations in interest rates. And while Friday's benign
report has fueled hopes for an equally benign CPI, the CPI is more comprehensive -- and any unexpected strength could reignite fears that the
could aggressively raise interest rates. Likewise, a tame report could lead to another broad-based rally. The Fed will have the last word when it meets Aug. 24.
The concerns were clearly seen in the performance of a number of stocks that have had huge upward moves in recent sessions, but saw profit-taking today. Internet infrastructure plays were among the largest point decliners on the
, which gained more than 50 points last week, closed down 6 7/16, or 3%, at 213 9/16. Note that the stock traded as low as 200 twice in today's session, but found buyers waiting at that level. Also,
, which also gained more than 50 points last week, closed down 9 3/4, or 4.6%, at 204. Like Redback, Juniper also found buyers waiting at the 200 level on a number of occasions during the session.
Two hot IPOs from last week,
also saw profit-taking. Red Hat closed down 10 3/4, or 13%, at 74 1/2, while Qwest Software ended down 7 5/8, or 16%, at 39 3/8.
On the upside were a couple of audio-related Internet stocks.
, which delivers audio versions of books and newspapers over the Internet, closed up 3 3/16, or 30%, at 13 7/8. The company announced agreements with both
to provide access to Audible's audio content. Microsoft finished down 3/8 at 84 5/16, while RealNetworks finished up 4 7/8, or 6.5%, at 80 1/8.
closed up 1 5/16, or 9%, at 16 7/16 after it said it would offer downloadable music on a number of
services. AOL closed down 2 1/16, or 2%, at 94 13/16 after trading as high as 98.
The clear winner among the Net bellwethers was
, which closed up 11, or 11%, at 109. The only news out on the online auctioneer was that -- along with
-- it is unveiling pagers that allow users to receive updates on their eBay auctions. Traders that went short eBay due to all its recent technological problems continued to get squeezed. SkyTel finished down 3/16, or 1%, at 19 13/16.