Net Sector Trends Up as Market Awaits FOMC Meeting

This week will bring an expected earnings report from Yahoo! and more speculation that the Excite portion of Excite@Home could be sold off.
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This week, investors in the Net sector, as well as in the broader market, will be focused on the

Federal Reserve Open Market Committee

meeting, which is slated for Tuesday. Also,

Yahoo!

(YHOO)

will report its third-quarter numbers after Wednesday's close. Ahead of these two expected events,

TheStreet.com Internet Sector

index was inching up 3.38, or 0.5%, at 650.50 this morning.

Scattered earnings reports have come in from various Internet companies the past few weeks, but the stakes will be a little higher with Yahoo! It is expected to report earnings of 9 cents a share, though it typically beats the consensus, and the whisper number is around 12 cents. The key for investors, though, is to figure out whether a strong quarter is already priced in.

Like many Net stocks, Yahoo! bottomed out in August, reaching a low of 110 Aug. 5. It since climbed back to a high of 187 3/8 on Sep. 27, but recently slid back to the low 170s. It was recently trading down 7/16, or 0.3%, at 175.

Ahead of its second-quarter report July 7, Yahoo! peaked at 189 1/4 on July 6 before going on the slide that left it at 110 about a month later despite beating earnings estimates in the second quarter by 3 cents. What's different this time around, though, is that the Net sector is heading toward what is expected to be one of its strongest periods. Yahoo! soared in the months that followed its third-quarter report last year, though that was when the Internet sector experienced a surge in popularity.

Also among bellwethers,

Amazon.com

(AMZN) - Get Report

was up 1 1/2, or 2%, at 78 3/4. The company's Anywhere program will allow users of

3Com's

(COMS)

new

PalmVII

to purchase items from Amazon's Web site. Amazon also said it was buying privately held

Convergence

, a developer of Internet access software, for $20 million.

Among other stocks in the news,

Excite@Home

(ATHM) - Get Report

was down 1 1/2, or 3%, at 43. The stock has been heavily traded over the past week on speculation that the Excite portion of the company could be sold off.

Also,

iVillage

(IVIL)

was off 1 15/16, or 6%, at 32 1/16. The company said that it had filed with the

SEC

for a 3 million-share offering.

Shares of

Preview Travel

(PTVL)

were up 2 1/4, or 12%, at 19 7/8 after the online travel agency said it would merge with

Sabre Holdings'

(TSG) - Get Report

Travelocity

site. The new company will be known as Travelocity.com. There was a delay in trading of Sabre Holdings.

Separately, Travelocity.com and

America Online

(AOL)

set a multiyear content and commerce pact valued at up to $200 million. Under the deal, Travelocity.com will become the exclusive reservations engine integrated into the AOL service when the Travelocity-Preview Travel merger is completed. AOL was up 7/16, or 0.5%, at 108 5/16.