Safety Net: Internet's Gains Cushion PC Sector's Fall

Small-cap Net stocks are gaining strongly at PC stocks' expense.
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SAN FRANCISCO -- Apparently it will take more than just an earnings warning from Compaq (CPQ) to slow down the tech sector. After a sharp drop on the opening, the Nasdaq has erased most of its losses with help from Internet stocks.

While Compaq and the other PC makers have weakened, Internet stocks remain strong, as illustrated by a 5% gain in

The Street.com Internet Sector

index.

eBay

(EBAY) - Get Report

was among the early point gainers on the Nasdaq on speculation that it will set up a joint venture with

Butterfield & Butterfield

this week. The deal reportedly will create a separate listing of premium items on eBay that would come from Butterfield & Butterfield along with other auction houses. eBay was up 11, or 6%, at 194 3/8, around midsession.

Shares of

RealNetworks

(RNWK) - Get Report

are soaring on news that

IBM

(IBM) - Get Report

agreed to use RealNetworks technology to receive and process music and related data from the Internet. It was up 25 1/4, or 12%, at 232 3/4.

Also rallying sharply is

Net.B@nk

(NTBK)

, as investors continue to discover the company. NetBank announced last week that it had opened a record number of new accounts in the first quarter as customers move their banking services online. It was trading up 32 1/2, or 27%, at 152. It has now doubled since closing at 76 on April 1 ahead of its announcement.

Both

AboveNet

(ABOV)

and

DoubleClick

(DCLK)

are on the rise after DoubleClick announced it had selected AboveNet to operate computers that control its Web service. AboveNet was up 23 3/8, or 22%, at 128 1/4, while DoubleClick was up 13 15/16, or 11%, at 142 13/16.

Also on the rise is

Winfield Capital

(WCAP)

. The company last week bought $516,236 in stock in

Modacad

(MODA)

, a maker of 3-D software that has a new apparel Web site. The stock was up 16, or 36%, at 60 1/4.

Pity those who invested in

theglobe.com

(TGLO)

following its 2-for-1 stock split, set Friday. The stock rose close to 20 points on Friday on news of the split, but dropped today on news the company filed to offer 4 million shares. theglobe.com was down 6 3/16, or 8%, at 72 3/4.

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