Net Stocks Continue to Get Hammered - TheStreet

Net Stocks Continue to Get Hammered

Earnings worries and CPI jitters contributed to the weakness.
Author:
Publish date:

As the day has progressed, the Internet sector has deteriorated, getting as ugly as Sunday's Yankees-Red Sox game when Boston fans littered the field with trash as their team headed for defeat.

TheStreet.com Internet Sector

index was recently down a whopping 27.44, or 4.1%, at 657.66. Losses in the Net sector reflected overall weakness among technology issues, with concerns that earnings may not be as good as once believed and worries about Tuesday's

Consumer Price Index

report contributing to the weakness. The DOT performed at its best when gains in the

Dow

topped triple digits earlier in the day, but as the rest of the stock market deteriorated, so did the Net sector.

Net bellwethers told the story.

America Online

(AOL)

was not able to take advantage of news that its fiscal first-quarter subscriber numbers would be above expectations. After trading as high as 111 1/16, AOL was recently down 3 13/16, or 3.6%, at 105 3/16. Also,

Amazon.com

(AMZN) - Get Report

was off 3 13/16, or 5%, at 71 1/4;

eBay

(EBAY) - Get Report

was down 8 3/4, or 6.5%, at 125 3/8; and

Yahoo!

(YHOO)

was down 4 5/16, or 2.5%, at 165 1/4.

Among other big losers were

Network Solutions

(NSOL)

, down 8 1/8, or 9%, at 84, and

priceline.com

(PCLN)

, off 5 5/16, or 8%, at 62 1/4.

Among stocks in the news,

eToys

(ETYS)

was down 7 11/16, or 11%, at 62 7/8.

The Wall Street Journal

reported today that eToys was the leading candidate to buy

Blue Mountain Arts

, a free greeting card service. Weakness in the stock probably reflects the $1 billion price tag that Blue Mountain could go for.

CMGI

(CMGI)

and

Excite@Home

(ATHM) - Get Report

also were seen as potential suitors. CMGI was recently down 7, or 7%, at 90 13/16 and Excite@Home was off 3 1/8, or 8%, at 37 11/16.

E.piphany

(EPNY)

was down 10 3/4, or 15%, at 62 3/4 on a day when its underwriters initiated coverage of the stock. Losses likely reflect a not-so-flattering accumulate rating placed on the stock by

Merrill Lynch

. Merrill put an 84 price target on the stock. Lead underwriter

Credit Suisse First Boston

initiated coverage with a strong buy rating, while

Hambrecht & Quist

, which also was an underwriter, began coverage with a buy rating.

Also, shares of

Youbet.com

(UBET)

were down 1 3/8, or 27.5%, at 3 5/8. The company is the subject of investigation by the Los Angeles district attorney's office regarding whether its betting service is legal.

Robertson Stephens

, an underwriter for Youbet.com, downgraded the stock to long-term attractive from buy due to uncertainty over the investigation and how it will affect subscriber growth. In a note on the downgrade, analyst Harry Curtis wrote that there is no indication how the investigation will be resolved. But, he wrote, the investigation was likely to delay the company's marketing efforts, which could slow subscriber growth.