RealTime IT News

Techs, Nets Rebound From Profit Worries

Internet and technology issues recovered from a morning sell-off on Thursday to finish up strongly. But worries about IBM's earnings outlook weighed on blue chip issues.

The ISDEX gained 12 to 742, well off its low of 715. The Nasdaq bolted 97 to 3960 after falling as low as 3820. The S&P 500 added 10 to 1456. But the Dow slipped 2 points to 10,481, unable to stay above 10,500. Volume declined on the NYSE to 945 million shares, but rose 10% on the Nasdaq to 1.47 billion shares. Advancing issues led 16 to 12 on the Big Board and 20 to 18 on the Nasdaq.

June employment data will be released on Friday. Analysts expect a 275,000 gain in non-farm payrolls, a 4.1% unemployment rate, and a 0.4% increase in hourly wages. Yahoo will kick off earnings season July 11, and Ariba will follow on July 12.

Earnings warnings from Visual Networks , CapRock Communications and Orckit weighed on Internet infrastructure stocks. Visual Networks cratered 14 5/16 to 11 15/16 after announcing that earnings would be 1 cent per share, instead of the 6 cents analysts were expecting. CapRock fell 5 5/16 to 12 5/8 and Orckit fell 4 3/16 to 13 13/16. The warnings hit the leading Internet infrastructure stocks: Corning fell 7 1/4 to 248 1/8, Juniper Networks fell 1 5/8 to 139 3/4, and JDS Uniphase dropped 5 23/64 to 113 5/8, below recent support. JDSU was also hit on concerns about insider sales. But SDL rose 8 11/16 to 284 after trading as low as 255.

First World Communications fell 5 9/16 to 4 1/16, also on an earnings warning. But On2.com gained 1 13/16 to 6 5/16 after preannouncing positive second quarter earnings.

i2 Technologies soared 12 7/16 to 113 11/16 on bullish comments from DLJ and from Paul LeCoque, president of LongView Capital Management. "One of my favorite positions in B2B is i2 Technologies," he told The Wall Street Transcript. "I look at i2 the way I look at a lot of my semiconductor, data storage, networking and fiber-optic companies. That is, no matter who wins in the B2B exchange and e-commerce marketplace, you're still going to need supply chain software, and i2 is the dominant provider of supply chain software."

PurchasePro initially rose on reports that it would be added to the Russell 2000, but closed down 7/8 to 38 1/16.

Mortgage.com gained 1/4 to 1 3/4 on news of an alliance with Wells Fargo.

Wall Street reacted favorably to Interwave's announcement that it will buy Microcellular Systems, bidding Interwave up 2 3/8 to 15.

Profit-taking continued to hit Digital Island , off 2 3/4 to 45 5/8. The stock has now given back all its gains from rumors that the company is expected to announce major contract wins.

Phone.com continued to struggle, losing 4 1/8 to 63 1/2 despite an SG Cowen Strong Buy rating and $100 price target.

MyPoints.com fell 11/16 to 15 3/8 despite a Merrill Lynch Buy rating.

Digex added 1 1/16 to 70 1/2 after Goldman Sachs added the Web hosting firm to its Recommended List.

Razorfish gained 1 3/16 to 17 1/16 on a Lehman Brothers Buy rating and $40 price target.

Netivation.com soared 1 1/8 to 2 5/8 on an EBI Securities Buy rating and $15 price target.

DoubleClick rose 1 11/32 to 38 27/32 on news that DoubleClick Japan will merge with NetGravity Asia Pacific on Monday.

Bluefly added 1/4 to 2 1/2 on news that it received an ad