Net Stocks Rise but Dollar's Retreat Tempers Enthusiasm

Dollar weakness and a soft Treasury market were keeping Internet-sector gains in check at midafternoon.

TheStreet.com Internet Sector

index was up 5.92, or 1%, at 601.33 after trading as high as 607.41.

Among stocks of note,

Red Hat

(RHAT)

remained red hot, up 7, or 6%, at 123 3/4. But note that after reaching an all-time high of 135 1/4 around 3 p.m. Wednesday, the stock settled at 116 3/4.

TSC's

own

James Cramer

took a look at Red Hat's performance in a

piece Thursday.

A partnership with Red Hat was boosting

Unify

(UNFY)

, a provider of software solutions for e-commerce. The company said it was extending its partnership with Red Hat by certifying two recently announced Internet products for use with Red Hat's Linux operating system. Unify was up 5, or 30%, at 21 3/4.

Also, there were rumors on

Jagnotes.com

that

Goldman Sachs

(GS) - Get Report

would buy for $30 per share the portion of

Wit Capital Group

(WITC)

that it does not already own. Goldman currently owns 20% of Wit Capital. Wit was up 3 11/16, or 21%, at 20 7/8 on the rumor.

Like Red Hat, a number of other stocks that have attracted the market's fancy of late also continued their one-way trip higher.

China.com

(CHINA)

was up 8 3/8, or 13%, at 71 1/16, while

Internet Initiative Japan

(IIJI)

was up 10 7/8, or 14%, at 89.

But other recent highfliers were seeing profit-taking after some huge run-ups.

Globespan

(GSPN)

, which has more than doubled over the past week, was down 14 3/16, or 13%, at 96 3/16.

Phone.com

(PHCM)

was down 4 5/16, or 2.5%, at 164 1/16.

Also on the downside was Internet advertiser

24/7 Media

(TFSM)

, off 4 7/8, or 14%, at 30 1/2. The stock was weak on a note by

Merrill Lynch

analyst Henry Blodget. Blodget wrote that after a conversation with management last night, he expected to make "a significantly higher-than-expected cut in EPS" due to recent acquisitions the company has made. Though he did not provide revised numbers, Blodget previously was expecting a loss of $1.45 for 1999 and a 70-cent loss for 2000.

"We are discouraged by the magnitude of the increased losses over the next two years (at least 3X and as much as 5X our current loss-per-share estimate). The investments are in promising areas, however, and they should strengthen the franchise long term," Blodget wrote.