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RealTime IT News

Stocks Drop, But Nets Outperform

Stocks climbed back from a steep drop on Thursday, only to get clobbered by a Salomon Smith Barney downgrade to Compaq.

Stocks sold off in the morning on concern about possible future Fed rate hikes, then climbed back to even before the Compaq news hit. The Nasdaq finished down 63 to 3877, the S&P 500 dropped 12 to 1442 and the Dow lost 129 to close at 10,398, just below the important 10,400 level. But the ISDEX outperformed, gaining half a point to 731. Volume rose to 1.1 billion shares on the NYSE, but declined to 1.54 billion shares on the Nasdaq. Declining issues barely led advancing ones on the NYSE, and led 21 to 18 on the Nasdaq. Liberate , off 1 9/16 to 24, and Intraware , down 1 1/16 to 18 3/4, both beat earnings estimates after the bell.

Shares of Juniper Networks and Broadcom boosted the ISDEX. Juniper rose 11 5/16 to 147 3/4 on news that it had signed a co-marketing agreement with Nortel Networks . The deal had been expected for some time. Juniper also rose yesterday on news that it had been added to Lehman's annual Uncommon Values list. Broadcom bolted 17 to 205 ahead of its addition to the S&P 500. For more on the ISDEX's recent performance, click here.

Priceline.com fell 3 9/16 to 36 5/8 on news that six airlines plan to band together to launch their own Web site offering low-priced airline tickets. Janney Montgomery Scott downgraded the stock from Buy to Accumulate, but Merrill Lynch analyst Henry Blodget came to Priceline's defense. He noted that the new industry service will sell unfilled seats, only a small part of Priceline's business. Blodget also said that airline ticket sales will decline to less than 50% of Priceline's gross profit next year.

Yahoo! , down 4 11/64 to 119 3/8, and Amazon.com , off 11/16 to 37 3/16, declined on cautionary comments by Lehman Brothers, which doesn't see much upside to Yahoo's upcoming earnings report and cautioned that Amazon's may come in on the light side. Lehman also said it may lower second half revenue estimates for Amazon due to lack of traction in the company's new areas. It was a Lehman bond analyst who sent shares of Amazon sprawling last week on concern that the company may run out of money next year. Amazon CEO Jeff Bezos was out in force yesterday defending his company, saying he expects to fund operations from cash flow in the final quarter of this year.

Shares of DoubleClick added 1 3/64 to 33 3/16 on news that the company had entered into an agreement with RealNetworks to sell advertising, sponsorships and e-commerce solutions across the Real.com network in 16 countries outside the U.S. RealNetworks declined 9/16 to 48 3/8 despite a W.R. Hambrecht Buy rating and $60 price target.

VeriSign rose 4 3/4 to 176 1/2 after CS First Boston reiterated a Strong Buy after a positive conference call with management.

Internet infrastructure plays, which led the Nasdaq's recent run up, were mixed. SDL Inc. fell 9 9/16 to 278 3/8 on news that it will build two new facilities and expand operations to meet demand. Corning rose 2 to 266 1/2 on positive comments and a $325 price target from Merrill Lynch. JDS Uniphase continued to struggle, off 5 3/18 to 116 1/2.

EarthLink declined 1/16 to 14 3/4 despite news of a national distribution deal with Hewlett-Packard. The company will become the leading ISP for HP Pavilion consumer PC sales.

Bid.com gained 13/32 to 2 13/32 on news that it had been selected by GE Capital Auto Financial Services to auction off-lease automobiles to dealers across North America.

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