Net Sector Follows in the Footsteps of Yahoo!

Yahoo!'s numbers have fueled hopes of a strong earnings season for Internet stocks.
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SAN FRANCISCO -- The whole Net sector is swinging to the volatile tune of Yahoo! (YHOO) , which posted strong earnings Wednesday.

Right after the opening bell, Yahoo! spiked to its session high of 175 1/4, but has been unable to trade above there since, once falling to a session low of 167. In recent trading, Yahoo! was up 1 5/16, or 0.8%, at 168 3/8.

The Internet sector has mimicked Yahoo!'s price action.

TheStreet.com Internet Sector

index was recently up 7.92, or 1.2%, at 661.77, midway between its session low of 650.85 and session high of 670.54.

These price swings aren't a big surprise. Yahoo! traditionally runs up into its earnings report, then sells off afterwards, often dragging the rest of the Net sector with it. And while Yahoo!'s numbers generally exceeded estimates, analysts were somewhat cautious in their

comments about the report and price of the stock. Gains may also just be shorts covering after Yahoo! blew away its numbers.

While Yahoo!'s stock ran up ahead of Wednesday's report, the magnitude of the move was not as great as in previous quarters. Yahoo! traded as low as 117 5/8 June 15, adding little more than 70 points when it peaked at 189 July 6. In comparison, Yahoo! gained nearly 100 points ahead of its first-quarter earnings report in April, rallying from 147 1/8 on March 24 to 244 on April 6, just ahead of its report. In advance of its fourth-quarter earnings from 1998, Yahoo! went from 116 on Dec. 31 to 222 on Jan. 11.

The bottom line: Yahoo!'s numbers have fueled hopes of a strong earnings season for Internet stocks, and some of the top names are benefiting from those hopes.

DoubleClick

(DCLK)

, which reports earnings next Monday, was up 3 15/16, or 4%, at 100 11/16.

Amazon.com

(AMZN) - Get Report

, which reports next Wednesday, was up 3 7/8, or 3%, at 125 3/4. And

National Discount Brokerage

(NDB)

was up 3 15/16, or 7%, at 57 11/16 ahead of its earnings report after the close today.

Also among the standouts was

RealNetworks

(RNWK) - Get Report

, which has flourished since announcing a deal with

Microsoft

(MSFT) - Get Report

last

week. RealNetworks reports earnings July 21. It was up 5 15/16, or 7%, at 91 7/8.

Shares of Internet service provider

MindSpring

(MSPG)

were heading up in the early afternoon.

CNBC

reported that MindSpring canceled an analysts' meeting for next week, leading to speculation that the company is doing some kind of deal with a PC manufacturer. It was trading up 6 11/16, or 15%, at 51 15/16.

Crosswalk.com

(AMEN)

, a portal and virtual community that serves Christians, was rallying today as well. The company reported today that growth of new members accelerated to 60% between the first and second quarters of 1999, compared with a 27% growth rate between the fourth quarter of 1998 and the first quarter of 1999. The company also said the number of average page views per month during the quarter were 6.53 million, representing a 57% gain over the 4.15 million monthly average reported for the first quarter of 1999. Crosswalk.com will report earnings in late July or early August. It was up 1 1/16, or 9%, at 13 1/8.