Net Sector Moves Up Ahead of Yahoo! Report - TheStreet

The Internet sector was showing few signs of concern about Yahoo!'s (YHOO) earnings report, scheduled for release after the close. Though Yahoo! was up only marginally, the rest of the sector was moving ahead steadily.

In early trading,

TheStreet.com Internet Sector

index was up 18.43, or 2.8%, at 686.45. Yahoo! was up 9/16, or 0.3%, at 174, continuing Tuesday's late rally after the

Fed

announced it was not raising interest rates.

Yahoo! is expected to report earnings of 9 cents a share for the third quarter, with a whisper number around 12 cents. That compares with earnings of 2 cents a share in the year-ago period. According to a note from

Merrill Lynch

analyst Henry Blodget, revenue for the quarter will be around $137 million, with an operating margin of 25%, 357 million page views per day and 90 million unique users.

Other Net bellwethers were carrying the sector.

eBay

(EBAY) - Get Report

was up 6 11/16, or 5%, at 147 13/16 after

Lehman Brothers

initiated coverage of the online auction site with a buy rating and a 200 price target.

Lehman analyst Brian Oakes wrote that eBay was not just a site for collectibles, but was "becoming a radical new tool for all consumers across almost any product category imaginable." And the analyst claimed that a co-branded site with eBay and

America Online

(AOL)

"is one of the more underappreciated elements to the eBay story." Lehman has not done underwriting for eBay.

priceline.com

(PCLN)

was up 5 3/8, or 8%, at 69 5/8 after

Merrill Lynch

reinitiated coverage of the stock with a near-term accumulate rating and a long-term buy rating. Merrill had not been covering the stock because it participated in priceline's secondary offering in August. Today's ratings are the same ones as Merrill previously had on the company.

Merrill's Blodget also addressed concerns about the large amount of insider stock that will be available for sale in the coming months, which has contributed to recent weakness in the stock. He wrote that approximately 150 million shares will become available for sale in February, but noted that priceline "has demonstrated a commitment to managing the orderly disposition of shares that become eligible for sale by implementing extended lock-up periods for directors and executives." Of the 150 million shares, he wrote that 119 million are beneficially owned by directors and executive officers.

priceline was not a

member of Blodget's Holiday Basket of Internet stocks.