Net Stocks Mixed After Bonds Slide on NAPM Strength

Plus, shares of Microsoft are softer on news of the company's investigation by the SEC.
Publish date:

SAN FRANCISCO -- Internet stocks were mixed as bonds weakened.

Treasuries slid following Thursday's strong

National Association of Purchasing Managers'

report. The long bond was down more than a point, pushing its yield back above the 6% level. Internet Sector

index was down 4.37, or 0.7%, at 612.56 after reaching a high of 626.32 early in the session.

Lehman Brothers


America Online


on its "10 Uncommon Values" list, boosting the stock 1 1/2, or 1%, to 111 1/2.



was one of the leading percentage gainers on the


, adding 5 23/32, or 75%, to 13 1/4.


(WMT) - Get Report

named Books-A-Million exclusive provider of books and related products to Wal-Mart's online customers.



was up 1 9/16, or 1%, at 173 13/16 after it said it expanded a marketing agreement under which it promotes

Procter & Gamble

(PG) - Get Report

products. P&G was down 1 11/16, or 2%, at 87 9/16.

On the downside was


(CNET) - Get Report

after the company's analysts day, held Wednesday. According to a note from

Deutsche Banc Alex. Brown

, CNet is planning to spend $100 million over the next 18 months to build brand awareness. Deutsche Banc cut its earnings estimates on CNet for 1999 to a loss of 50 cents a share from the 20-cent profit previously forecast. The

First Call

estimate was for a 21-cent gain.

Deutsche Banc said that the negative earnings impact "could create knee-jerk selling pressure," but it remained "enthusiastic about CNet's long-term market opportunity, which is clearly expanding." The firm maintained its market perform rating on the stock. CNet was down 5 3/4, or 10%, at 51 7/8 in recent trading.

Microsoft Softer After Disclosure

Shares of software giant


(MSFT) - Get Report

were lower in early trading after the company said after the close on Wednesday that the

Securities and Exchange Commission

was investigating its "reserves and reserves policies." The SEC inquiry was started after a brief article in

Wall Street Journal

in January about a wrongful-dismissal lawsuit filed by a former Microsoft internal auditor.

CFO Greg Maffei said Microsoft was known for its conservative accounting practices. Microsoft sets aside a part of its revenue, called "unearned revenue," to account for future upgrades and services that it has to deliver later on some programs, such as Windows. Unearned revenue has since ballooned to more than $4 billion.

Analysts, however, still see Microsoft's business as healthy, though

Merrill Lynch

analysts said today that they expect Microsoft to stage a near-term retreat, as concerns over the SEC inquiry should spur profit taking. Microsoft was weaker early on, falling 1 11/16, or 2%, at 88 1/2.

Separately, Maffei also said the company was making a number of accounting changes that will have only a small effect on financial results. The changes will add about a penny a share to net earnings for the fourth quarter, which Microsoft will announce on July 19.


Medora Lee