Net Stocks Discover There's Something About Mary

Positive words from Morgan Stanley analyst Mary Meeker on America Online have caused the Internet sector to heat up.
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SAN FRANCISCO -- It's one thing for any old schmo to say something positive about an Internet stock. But when Morgan Stanley Dean Witter analyst Mary Meeker says roughly the same thing, investors take notice.

America Online

(AOL)

was the beneficiary of Meeker's power today after the so-called "Queen of the Internet" upped her rating on the stock to strong buy from outperform and said the broadband scare was overdone. AOL was up 10 11/16, or 8%, at 139 in early trading, giving Internet stocks a boost.

AOL took a hit after it was not a part of the

MediaOne

(UMG)

deal won by

AT&T

(T) - Get Report

, amid fears that it was being left out of the hot broadband market. But in a research note published this morning, Meeker said that she expects 65% of users will still access the Internet through dial-up service by 2002. AOL "has leverage to embrace broadband," Meeker said. She noted that the company already has two DSL deals and that she expects it to generate more in the next four months.

What's Happening

Cisco

(CSCO) - Get Report

will be under the microscope when it reports its fiscal third-quarter earnings results after the close today. The company, featured in a

TSC

story last week, is expected to report earnings of 37 cents a share, according to

First Call

. Shares of Cisco were up 1 3/4, or 1.6%, at 111.

Shares of

Intel

(INTC) - Get Report

were up slightly this morning on reports that the company will cut prices for its Pentium II and Pentium III chips by as much as 34% next week when it introduces its 550MHz Pentium III. Price cuts from

Advanced Micro Devices

(AMD) - Get Report

are also anticipated. Intel was up 1/2, or 1%, at 61 1/8, while AMD was up 3/16, or 1%, at 18 7/8.

SportsLine

(SPLN)

was also climbing after the company said it launched a European unit and had also purchased a sports Web site from

Reuters

. The stock was lately up 4 1/8, or 13%, at 35.

On the downside, shares of

CNet

(CNET) - Get Report

were down early today after Monday's huge run-up following the announced merger between

Xoom.com

(XMCM)

and the Internet properties of

NBC

.

Snap.com

, co-owned by NBC and CNet, is a part of the deal, and CNet will own 13% of the new NBC Internet project. CNet was down 8 3/16, or 6%, at 128, after gaining more than 22 points on Monday. There was some talk that gains were fueled by short-covering, and if that has dried up, traders may be looking to take profits. Xoom.com was little changed early on. In-depth analysis of the deal was

featured in two recent

TSC

pieces.

Shares of

Lycos

(LCOS)

were also lower following gains made Monday on reports the company's merger with

USA Networks

(USAI) - Get Report

may be off. Lycos was down 5 1/4, or 5%, at 100 after gaining more than 15 points Monday.