SAN FRANCISCO -- The technology sector was weighed down this afternoon by fears of higher interest rates, the same concerns that sent the Dow to a 200-point loss. While the Nasdaq had been in positive territory earlier in the session, it has since slipped into the red.
A report from a private consulting firm indicating that the
could raise interest rates if growth remains strong, spooked Treasuries as well as stocks.
Net stocks can be more sensitive to increases in interest rates due to their high valuations.
Today's losses in tech stocks follow Wednesday's modest recovery. But analysts remain divided over whether the correction seen in the sector has concluded.
David Levy, an Internet analyst with
ING Baring Furman Selz
, said there "was certainly the possibility for more downside," but as the stocks continue to correct and valuations come down, "the easier it is to buy."
Levy said that he would look for a recovery to first occur in larger-cap issues like
, one which he said has not occurred to a great extent yet. While he noted that the second and third quarters show slower growth for many industries, he said there will not be a lack of news in the sector.
In trading today, AOL was down 3 3/8, or 3%, at 117. It had reached a low of 105 7/16 on Wednesday before recovering. Yahoo! was down 5 3/16, or 4%, at 135 11/16. It traded as low as 120 1/2 on Wednesday.
TheStreet.com Internet Sector
index was off 8.2, or 1.4%, at 563.8.
has remained in positive territory thus far. The company said it had launched its European search operations with four new European customers which will integrate Inktomi's European search services into their online offerings. Inktomi was up 3, or 3%, at 101.
Also on the plus said was
analyst Joe Osha reiterated a near-term accumulate rating and long-term buy rating on the stock. Osha wrote that recent weakness in the stock has presented a buy opportunity. He placed a 12- to 18-month price target of 86 on the stock. Intel was up 1 11/16, or 3%, at 53 3/8.
Several chip stocks jumped, then settled after rumors swirled about a possible recovery in the market for dynamic random-access memory, or DRAM, chips. "DRAM prices ticked up for the first time in two years," said one trader.
traded to a high of 47 3/8 but was recently trading up 3/16 at 45 5/16.
lifted to a high of 57 3/4 but has since eased to 55 13/16, up 1 5/16, or 2.4%.
persisted, trading up 2 1/4 or 6%, at 37 7/8 but that was off the high of 39 3/8.
-- Kevin Petrie
Separating IPO Haves from Have-Nots
Five Internet companies went public on Wednesday, with two of them closing below their offering prices. Results for the five were mixed again today.
(JWEB:Nasdaq), a low-cost Internet service provider with free email, was trading up 3/4, or 6.5%, at 12 3/8 around midsession, though that was still below its offering price of 13.
(ZIPL:Nasdaq), a wholesale Web service provider, was off 1/4, or 2%, at 12 1/8. It was priced at 14.
(EDGR:Nasdaq), an online supplier of
filings, was off 1/4 or 2.6%, at 9 5/16, holding near the 9 1/2 level where it was priced.
The two companies that enjoyed the most success on Wednesday were again firmer.
(DIR:NYSE), the online brokerage unit of
Donaldson Lufkin & Jenrette
, was up 9 1/4, or 31%, at 39 1/4.
(STRM:Nasdaq), a Latin American-geared portal, was up 11 3/8, or 45%, at 37 7/16.