SAN FRANCISCO -- Misery loves company, which brings us to the growing tenderness between Net stocks and online brokerages.
Net stocks Tuesday continued their recent skid, with
TheStreet.com Internet Sector
index down 22.33, or 4.1%, at 517.70, almost 40 points below its early-session high of 553.42. Squelched rumors of a deal between
presssured technology leaders including Yahoo! and
, each off around 5%.
Even worse off were the online brokerages, which were hamstrung by the seemingly never-ending weakness in their Net brethren and belted by a caustic research note from
Credit Suisse First Boston
analyst Bill Burnham. His report, issued Tuesday morning, suggested online brokerages could show a decline in sequential trading volume from the second quarter to the third quarter.
As a result,
was down 3 3/8, or 14%, at 20 5/8 and
was down 3 11/16, or 13%, at 25 5/16, while
was down 4 5/16, or 10%, at 38 1/8.
Ryan Alexander, vice president of equity research with
, said the brokerage firms were in a period that was typically slow, and news of a slowdown in growth was creating some concerns.
"I just think you're beginning to see more of a seasonal pattern emerge more with Internet stocks and these business models are not expanding at the same rate we've seen historically," he said. "And consequently, revenues are not growing sequentially."
It appeared as if talk of the purported Yahoo! deal would give the hard-falling Net stocks a much-needed shot in the arm. But that was before rumors of the talks were denied by Excite@Home President George Bell at the
BancBoston Robertson Stephens
Investing in Innovations
conference in San Francisco this morning. Before his presentation, Bell told
there was "no truth to the story."
Excite@Home, which rallied sharply early on the report, was recently down 1 3/4, or 2.5%, at 41 3/4.
Pacing the big losers were the Net bellwethers, which have been in a funk and continue to be a drag on the sector. Yahoo! was off 6 9/16, or 5%, at 125 3/4. America Online was down 4 7/8, or 5%, at 88 and
was down 6 11/16, or 8%, at 81 9/16.
Also on the downside was
, off 5 3/8, or 7%, at 72 1/8 on news that
Delta Air Lines
met terms allowing it to exercise a warrant to buy 18.6 million priceline shares at 93 cents a piece, a wee bit below the shares' current market value.
reported that Delta obtained the warrant by agreeing to be the first major carrier to sell tickets through the name-your-own-price online service.