SAN FRANCISCO -- Internet-related stocks continue to get hit today, and it may be the start of something bigger.
TheStreet.com Internet Sector
index remains down 1% for the day at 401.04. On Monday, the DOT (affectionately known in these parts as the
Department of Transportation
index) peaked at 457.85.
Michael Murphy, editor of
Overpriced Stock Service
and manager of the
Murphy New World Technology
fund, said he began to sell into the Internet strength on Monday in all of the search-engine companies and the auction sites, along with some of the online brokerage services.
"I think the whole sector is about to blow," said Murphy. "There's been a lot of people waiting for the calendar to turn and come Monday, they'll be for sale."
Murphy said market makers began to sell around midday Monday in advance of selling by individual investors, who could sell on Tuesday and have settlement of the trades at the first of the year for tax purposes. Day traders also stepped in to add to the momentum, he said, and on Monday he expects institutions to bail in a big way.
"I really think it's going to be a bloodbath," said Murphy.
Some of the price action appears to bear out what Murphy is saying.
One of the biggest movers of this week was
Active Apparel Group
. The stock surged from a little over 1 on Dec. 23 to a high of 25 on Tuesday after its announcement Monday that it was establishing a Web site. But shares of AAGP are now back below 9 today, as the sector continues to cool and traders book profits. Shares of
are off nearly 20% after more than tripling after announcing agreements with
Murphy said even though online retailers posted better-than-expected sales over Christmas and the outlook going forward is positive, it is still difficult to be profitable online, and the low cost of entry makes for heavy competition.
of the day is
Geerlings & Wade
, which is up around 25% after the direct marketer of wines and wine-related products announced it was making its Web site more customer-friendly and adding products to the site. Shares were up 1 13/16 at 9 after trading to a high of 12 3/16 earlier.
Finally, the beginning of 1999 is having a positive impact on a few companies doing work on the Y2K problem. Shares of
have climbed more than 40% today,
was up 24%, and
was up 12%. There seems to be no real news behind the moves, but they're reminiscent of the crazy run that Y2K stocks had exactly two years ago on this date.
Shades of "Auld Lang Syne"?
And please, don't say it's time to party like it's 1999.