SAN FRANCISCO -- Things are looking good in the Internet sector.

Earnings season has arrived, and with no Net companies warning, there are hopes for positive news. Couple that optimism with reduced interest-rate concerns following last week's

Federal Reserve

meeting and a stronger Net IPO market, and tech investors suddenly have a reason to be excited again.

Bruce Smith, Internet analyst with

Jefferies

, said the Net sector's focus is on earnings season, which begins Wednesday with

Yahoo!'s

(YHOO)

second-quarter numbers. Smith said that the second quarter is usually a good one for the Net sector, and he expects to see strong results across the board.

Yahoo! is expected to report earnings of 8 cents a share, according to

First Call

, compared to 15 cents a share in the second quarter of last year. Revenue, which Smith says is the most important measure for the company, is expected to be around $103 million vs. revenue of $41.2 million in the second quarter of last year and $86 million in the first quarter of this year. Smith looks for second-quarter revenue of $106.5 million.

With the stock approaching the 200 level, there also is speculation that the company could split the stock. When it reported its fourth-quarter 1998 earnings in January with the stock trading around 200, Yahoo! announced a 2-for-1 split. In recent trading, Yahoo! was up 7 3/4, or 4%, at 185 7/8.

Another Net stock making news was

Phone.com

(PHCM)

, which makes software that allows wireless phone customers to have access to news, email and stock quotes. Underwriters

Credit Suisse First Boston

,

Hambrecht & Quist

and

U.S. Bancorp Piper Jaffray

all initiated coverage of the stock today with positive ratings. Both Credit Suisse First Boston and U.S. Bancorp Piper Jaffray began their coverage with strong buy recommendations, while H&Q initiated its coverage with a buy rating. The stock was up 8 3/16, or 12%, at 76 11/16.

Books-A-Million

(BAMM)

was trading higher today on rumors that

Borders

(BGP)

would make a bid to buy Books-A-Million. Books-A-Million was up 3, or 26%, at 14 3/4, while Borders was off 3/16, or 1%, at 14 5/8.

The rumor apparently was started on

JagNotes.com

, which was reportedly behind Friday's rumor that

Amazon.com

(AMZN) - Get Report

was interested in buying

Onsale

(ONSL)

, causing shares of Onsale to rise 36%. Today, with Internet stocks mostly higher and no additional news on a buyout, Onsale was down 2 1/16, or 8%, at 23 3/16.

Also among the hottest stocks this afternoon were some that recently came public.

E-Loan

(EELN)

, an online mortgage provider that went public June 29, was up 17 3/16, or 37%, at 64.

GoTo.com

(GOTO)

, which debuted on June 18, continued to benefit from last week's announcement that it would be the leading search provider for

Netscape's

Net Search program. Shares of the company were up 14 1/4, or 28%, at 64 3/4.

Finally,

Edgar Online

(EDGR)

, which went public on May 26, was up 4 29/32, or 50%, at 14 11/16. The stock was mentioned in

The Wall Street Journal

as being a pick of the

Robertson Stephens

(RSEGX) - Get Report

Emerging Growth fund.