Struggle in Net Shares, Amazon Continues Into Afternoon

Precipitated by ongoing weakness in Treasuries, along with technical factors, this morning's Internet breakdown has persisted through the afternoon.

TheStreet.com Internet Sector

index was lately down 18, or 3%, at 555.99. The index has continued to struggle after hitting a key technical level at 600 last

week.

Losses have been pronounced in many of the Net bellwethers, with

Amazon.com

(AMZN) - Get Report

slipping significantly -- recently down 7 1/8, or 6%, at 121 3/8.

TSC

columnist

Herb G.

singled out the stock in a

piece published early today.

Yahoo!

(YHOO)

was down 5 1/16, or 3%, at 143 15/16;

America Online

(AOL)

was off 4 13/16, or 5%, at 94 5/16; and

eBay

(EBAY) - Get Report

was down 6 5/8, or 5%, at 120 5/8.

Dan Mathisson, head stock trader with

D.E. Shaw Securities

, said that with the sector so strong over the past few weeks, "It's natural for them to give back some." Mathisson said volume was extremely light and that a "determined seller" could have a larger impact than normal.

"Half of Wall Street is still on vacation," he said. "At this point, it's nothing particularly significant. It's not anything specific with the day."

The drop in Net stocks has coincided with a rise in interest rates that began last week. After dropping as low as 5.85% on Thursday, the yield on the long bond has increased steadily, busting above the key 6% level today. The focus in the Treasury market is on Friday's employment report.

Among other prominent losers,

drugstore.com

(DSCM)

was down 11 5/16, or 17%, at 50 3/16, though there was no apparent news behind the move.

Exodus

(EXDS)

was down 5 3/4, or 7%, at 77, while

DoubleClick

(DCLK)

was down 6 1/16, or 6%, at 97.

Online financial sites have continued to get hammered as well, in part due to the interest-rate concerns.

The Street.com e-Finance

index was lately off 3 29/32, or 6%, at 61.

Ameritrade

(AMTD) - Get Report

was down 1 3/16, or 6%, at 20 1/8, while

E*Trade

(EGRP)

was off 1 5/8, or 6%, at 24 5/16. Both stocks were downgraded by

Lehman Brothers

last week.

Not all the news in the sector has been bad, however. Shares of

Scient

(SCNT)

, a provider of services to companies setting up Internet commerce, were higher after

Morgan Stanley Dean Witter

upgraded the stock to outperform from neutral. The stock was up 11 3/8, or 22%, at 63 3/8.