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Net Stocks Bend but Don't Break

Also, two Internet-related IPOs see mixed results and National Semi gets out of the PC chip business.

SAN FRANCISCO -- Net stocks are mostly lower, but have shown some resiliency along with the rest of the market today.

Dan Mathisson, head stock trader with

D.E. Shaw Securities

, said even though the broader market is lower as well, the rotation out of Internet stocks and into the stocks with better fundamentals and/or lower price to earnings ratios.

"It just looks like people are looking at fundamentals," he said. "For the time being, the momentum is dead."

But what is different about this selloff that wasn't seen in recent Net selloffs, according to Mathisson, is that it has not coincided with a broader market selloff, he says. That indicates it could be more extensive than previous setbacks. Mathisson also said rising yields in the Treasury market are more of a drag on Net stocks because prices of the stocks are based on future earnings so any inflation will erode the value of future dollars.

"I hate to say it feels different because we've seen these stocks come back before, but the pattern is different," he said.

Running out of Steam?

Two Internet-related IPOs are debuting today and the results have been mixed.

Silknet Software

(SILK:Nasdaq), an Internet software provider, and

(CDOT:Nasdaq), which provides commercial real estate information on the Internet, began trading today.

Silknet was up 6, or 40%, at 21, while actually was trading down 1 1/4, or 8%, at 13 3/4. Richard Peterson, market strategist with

Securities Data

TheStreet Recommends

said if were to close lower it would be the 12th IPO this year to close lower on its first day of trading but the first Internet IPO.

Peterson said that he didn't think was appealing to day traders, who often account for much of the enthusiasm in the Internet IPOs, because the company does commercial real estate.

"It's hard to justify enthusiasm for lesser-known, less-visited sites and companies with less well-defined business models," said Peterson.

National News

Investors are cheering news that

National Semiconductor


is getting out of the PC-chip-making business. The company said today it was leaving the PC-chip market to focus on the information appliance market and its traditional analog business.

BancBoston Robertson Stephens

upgraded the stock to buy from long-term attractive on the news. It was trading up 2 3/4, or 19%, at 17 3/8.

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