RealTime IT News

Stocks' Gains Cut In Half

Stocks got off to a strong start on Monday, but gains were cut in half by day's end. Weakness in Yahoo dragged Net stocks lower.

The ISDEX lost 4 to 806. The Nasdaq rose 27 to 4070. The S&P 500 added 7 to 1514, and the Dow climbed 60 to 11,252. Volume rose to 727 million shares on the NYSE and 1.36 billion on the Nasdaq. Decliners led 14 to 13 on the NYSE, but advancers led 21 to 18 on the Nasdaq. For earnings reports, visit our earnings calendar and reported earnings. For after hours quotes and news, visit our new after hours trading site.

Yahoo lost 11 7/8 to 122 3/8 on Lehman Brothers comments that the company continues to face a tough advertising environment, and that the company's stock price could suffer if third quarter revenues come in light. The firm rates Yahoo a Neutral.

The news at first had little effect on other Internet stocks, but the selling pressure began to spread as the day wore on. Advertising stocks were mixed after strong gains on Friday on a rosy Jupiter Communications report on Internet advertising growth, which Lehman Brothers also questioned. DoubleClick lost 2 5/16 to 39 1/2 and 24/7 Media gave up 1 1/8 to 15 7/16. But Engage gained 15/16 to 12 1/8.

AskJeeves , another advertising-driven company, gained 15/16 to 26 1/16 on a USB Piper Jaffray Strong Buy rating and $51 price target. The firm believes AskJeeves could exceed estimates for the third quarter due to a strong showing in corporate services.

Cisco Systems , up 11/16 to 66 3/16, announced an alliance to accelerate the development of the content delivery services market. Other companies in the alliance include PSINet up 9/16 to 17 15/16, Network Appliance up 3 5/16 to 104 1/8, Genuity , up 3/16 to 8 1/4, and NaviSite , off 1/16 to 44.

FreeMarkets gained 5 1/4 to 69 1/2 on a Goldman Sachs Trading Buy recommendation and $100 price target. But i2 and Commerce One pulled back from breakouts on Friday. i2 was off 7 5/8 to 158 7/8, back below its 160 breakout point, and Commerce One lost 2 1/4 to 51 5/8, once again running into resistance at 55.

GetThere.com soared 5 1/16 to 17 3/16 on news that it will be acquired for 17 3/4 in cash by Sabre Holdings , which owns 70% of Travelocity , which gained 2 13/16 to 15 15/16.

Bluefly soared 1 9/16 to 3 1/2 on news of an expanded alliance with America Online .

Speechworks rose 2 1/4 to 58 1/2 on Buy ratings from Chase H&Q and USB Piper Jaffray. divine interVentures gained 5/16 to 7 1/8 on a Bear Stearns Buy rating and $14 price target.

Edgar Online bolted 1 7/16 to 4 3/4 on a Fahnestock Strong Buy rating and $9 price target.

webMethods added 1 3/16 to 90 1/16 on a First Analysis Strong Buy rating and $200 price target.

Some technical comments on the market: Traders got nervous today at some very important levels. The S&P 500 turned back just a few points from its all-time closing high (1527.46). Also, the S&P negated a bearish rising wedge this morning, but then fell back into it by the close, another sign of a market that's not sure if it wants to break out. The Dow fell back from what would have been its highest close since January's 11,723 all-time high, but the index failed to close above the April high of 11,287. Today's moves in the indexes weren't strong enough to negate Friday's reversal signals, but further strength could