Internet Stocks Benefit From Positive Economic News
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Internet issues posted strong gains Friday as investors appeared assured by the latest economic news that suggested interest rates may remain stable over the near term.
The Commerce Department said Friday that personal incomes in the United States rose a seasonally adjusted 0.5 percent in April and personal spending rose 0.4 percent. Both numbers generally matched economists' expectations.
The one negative note was the personal savings rate, which fell to -0.7 percent in April, showing that consumers were once again decreasing their reserves to spend on consumer goods. Economists said interest rates were likely to stay unchanged over the near term since the economy was cooling off. However, they were quick to point out that the imbalance could cause a market correction if it goes unchecked for a long period of time.
internet.com's Internet Stock Index gained 23.01, or 4.69 percent, to 513.34, the Dow Jones industrial average climbed 92.81 to 10,559.74 and the Nasdaq Composite jumped 51.26 to 2,470.41.
Shares of merger partners @Home Corp. and Excite Inc. both gained on news that the companies' boards had approved their merger. @Home (ATHM) added 4-13/16 to 126-3/4 and Excite (XCIT) climbed 7 to 133.
Yahoo! announced Friday that 200 Geocities employees would be losing their jobs and that it would be taking a $68 million pre-tax second-quarter charge to pay for severance packages. The company also said it plans to integrate Geocities' Web publishing tools with its own community-building tools.
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