Net Sector Inches Up, but Awaits Fed Decision

The Net sector is on edge as it waits for the Fed and Yahoo! to make their pronouncements.
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What's changed since yesterday? Well, a decision from the

Federal Reserve

regarding interest rates is just a few hours away (around 2:15 p.m. EDT) and

Yahoo!'s

(YHOO)

earnings report is now just one day away. The Fed is widely expected to leave interest rates unchanged, though it could change to a tightening bias.

But both of this week's key events will help stifle trading activity today and could keep the Internet sector off balance.

TheStreet.com Internet Sector

index was up 3.24, or 0.5%, at 658.85 this morning.

Yahoo! reports earnings after the close Wednesday. Though the company usually beats earnings estimates, it often comes under pressure soon after it reports as traders take profits from a pre-earnings run-up. It can be a drag on the rest of the sector as well. However, some contend that because it is so well known and the sector has a propensity to flounder after Yahoo! reports, it may no longer be a valid trade. In addition, the Net sector is in what is expected to be a strong fourth quarter.

In early trading, Yahoo! was down 2 3/4, or 1.6%, at 168 7/16. Also among bellwethers,

America Online

(AOL)

was up 3/16, or 0.2%, at 109 5/16. The company was set to introduce its new 5.0 version today.

Amazon.com

(AMZN) - Get Report

was off 1 11/16, or 2%, at 75 3/8. The losses may be in response to today's

Wal-Mart

(WMT) - Get Report

analysts meeting, during which the company was expected to provide details of its Internet plan.

Also,

Foundry Networks

(FDRY)

, which has made it onto

James Cramer's

Red Hots list, was up 17 1/4, or 13%, at 153. The company said today that preliminary estimates show that third-quarter revenue was exceeding expectations and would have a positive effect on earnings. Foundry, which went public Sept. 28, is a computer networking firm.

And

Juniper Networks

(JNPR) - Get Report

was up 6 9/16, or 4%, at 188 11/16 after

Warburg Dillon Read

initiated coverage of the stock with a buy rating and a 12-month price target of 240. Warburg Dillon Read has not done underwriting for Juniper.