Gearing Up for an Autumn Ascent

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Call it wishful thinking, but I'm genuinely optimistic that Internet stocks, battered and beleaguered for the past five months, will begin to show some strength over the next few weeks.

On what do I base this upbeat assessment? Wishful thinking, for one. But also, as I've said often recently, the round of Q2 reports coming out in the past six weeks or so has brought the Internet landscape into much sharper focus for investors. There's little room for delusion these days; red ink and vanishing cash reserves, not to mention Nasdaq delistings, are a clear sign of doom. Conversely, profits, large market share and robust revenue growth add up to a winning investment.

This fall, the winners will rise from the ashes of this year's market meltdown, in large part riding a wave of sideline money entering the game. The losers...well, when you've already lost 90% of your value, that extra 10% comes pretty hard.

Other things in favor of a rally: The Fed appears satisfied it has successfully tapped the brakes on a runaway economy, so interest rate hikes are no longer a rubber-stamp affair. Then there are the numbers: This week's results show 11 of 13 sectors, and nearly 60% of individual Internet stocks, gaining. Also, in the past month, 54% of all Internet stocks have advanced. Here's hoping the momentum carries over beyond the Labor Day weekend. Have a great holiday. *Market Cap figure is in millions unless otherwise noted.

  
PERFORMANCE BY SECTOR
                          Ave. 7-Day
                           % Change

Wireless                    +18.2%
E-tailers                   +11.0%
E-commerce Enablers          +9.4%
Performance Software         +7.7% 
Financial Services           +7.1%
Search/Portals               +7.1%
Internet Services            +5.9%
Advertising/Marketing        +4.9% 
Content/Communities          +4.4%
Speed/Bandwidth              +2.8%
ISPs/Access Providers        +2.0%  
Security                     -0.7%
Consultants/Designers       -10.8%

 
TOP 10 GAINERS              7-Day % Gain         Category

ESTM   E-Stamp               106.9%              E-tailers
LBRT   Liberate               67.2%              Performance Software
SKDS   SmarterKids.com        56.8%              E-tailers
PPRO   PurchasePro.com        55.2%              E-commerce Enablers
GTHR   GetThere               54.4%              Performance Software
IIIM   i3 Mobile              51.1%              Wireless
BFLY   Bluefly                50.0%              E-tailers
EDGR   EDGAR Online           47.2%              Content/Communities
XCAR   XCare.net              46.4%              E-commerce Enablers
FVCX   FVC.com                44.1%              Performance Software
ALOY   Alloy Online           43.0%              E-tailers


TOP 10 LOSERS               7-Day % Loss         Category
 
VIAN   Viant                 -46.8%              Consultants/Designers
CYSV   Cysive                -39.3%              E-Commerce Enablers
CVGP   Convergent            -31.2%              Consultants/Designers
PXCM   Proxicom              -24.3%              Consultants/Designers
DSLN   DSL.net               -23.8%              ISPs/Access Providers
VCNT   Vicinity              -23.7%              Internet Services
TPN    TownPagesNet          -23.5%              Content/Communities
MSPR   Mainspring            -21.6%              Consultants/Designers
NTGX   net.Genesis           -21.1%              Performance Software
BWAY   Breakaway Solutions   -20.9%