RealTime IT News

Stocks Rise Ahead of Fed Meeting

Stocks rose on Monday ahead of the two-day Federal Reserve meeting. Internet issues managed to gain despite a nearly 20% decline in shares of Inktomi.

The ISDEX gained 4 to 711 after holding critical support at 700. The Nasdaq gained 66 to 3912. The Dow rose 138 to 10,542 and the S&P climbed 13 to 1455. Volume rose slightly on the NYSE to 884 million shares, but declined on the Nasdaq to 1.3 billion shares. Advancers edged decliners by 14 to 13 on the NYSE and 21 to 18 on the Nasdaq. The Federal Reserve meets Tuesday and Wednesday, and most analysts expect no change in interest rates.

Shares of Ariba , which gained 3 5/8 to 92 3/16, declined to 91 in after-hours trading after announcing it would acquire privately-held SupplierMarket.com for 6.3 million shares, a move that apparently would put Ariba into competition with FreeMarkets , which declined 2 3/16 to 46 9/16 in regular trading but did not trade after hours.

Shares of Inktomi weighed on the ISDEX, losing 25 5/16 to 115 1/16. Yahoo! will use Google instead of Inktomi for general Internet search queries. However, Inktomi officials said Yahoo! represents only 2% of the company's revenues. And Inktomi was selected as the premier search provider for Yahoo's new Corporate Yahoo! service. Other companies selected for the new corporate service include Critical Path , Netegrity , TIBCO Software , Citrix Systems and Hewlett-Packard . Critical Path gained 4 1/16 to 54. But Yahoo! fell 9 7/8 to 119 7/16; critical support is 111-112.

Merrill Lynch analyst Henry Blodget called the decline in Inktomi shares an overreaction, noting that the company has a history of winning back business, and that the Yahoo! corporate service deal offers some upside. For more on the story, click here.

Shares of Scient fell 9 9/16 to 37 1/2 on a Banc of America downgrade from Buy to Market Perform after two of Scient's customers filed for bankruptcy.

Shares of HomeGrocer.com fell 1 7/32 to 6 7/8 on news that it will be bought out by Webvan , off 1 13/32 to 7 5/16. The all-stock deal will give HomeGrocer shareholders 1.076 shares of Webvan for each share of HOMG. Both stocks had run up recently on news that Webvan expects to exceed Wall Street expectations in its upcoming earnings report.

Akamai gained 16 7/8 to 119 3/8 on news of an extended agreement with Yahoo! and word that the company's results will exceed expectations.

WebTrends , up 1 3/16 to 37 3/4, and Vignette , up 4 1/8 to 45 1/4, gained on news that Vignette will offer integration between WebTrends' eBusiness Intelligence solutions and Vignette's V/5 Platform.

Radware gained 2 3/16 to 27 15/16 on news of an alliance with Compaq . Intraware climbed 1 1/4 to 19 5/16 on news of a deal with Hewlett-Packard.

Friday's hot IPO Accelerated Networks added 13 to 60 7/8, down from an intraday high of 67. Internet infrastructure plays returned to form. Corning added 20 1/8 to 260 3/8, SDL Inc. rose 22 11/16 to 290, and Juniper Networks tacked on 6 3/16 to 129.

VerticalNet fell 2 5/16 to 36 3/8 on a Janney Montgomery Stock downgrade from Buy to Accumulate, based on valuation.

Digex gained 2 11/16 to 69 15/16 on an AG Edwards upgrade to Buy from Maintain Position, based on the firm's belief that Digex will emerge as a leader in the Web hosting space.

Shares of Amazon.com added 1/8 to 34 on positive co