Internet Issues Punished
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Higher bond yields combined with a dose of bad news from two sector leaders led to a rough reception for Internet stocks Friday as some shed almost 10 percent.
internet.com's Internet Stock Index tumbled 26.62, or 5.34 percent, to 472.07, the Nasdaq Composite shed 36.50 to 2,448.12 and the Dow Jones industrial average lost 130.76 to 10,490.57.
Shares of Internet incubator CMGI Inc. (CMGI) plunged 11-3/4 to 89-3/4. Investors sold the stock after the company reported a fiscal third-quarer loss of 30 cents a share. That's more than double the 13 cents analysts were expecting.
The company also announced plans to start two additional venture-capital funds over the next 10 months.
America Online Inc. (AOL) dropped 5-5/8 to 99-7/8. Shares continued to be hurt by comments from Merrill Lynch's Henry Blodget who predicted AOL's international growth will be significantly lower than original estimates. He also said that growth will be hurt by the spread of free Internet access in the United Kingdom.
Domain registrar Network Solutions Inc. (NSOL), which was one of the day's few positive stories in mid-session, ended down as well. Shares closed off 2-13/16 to 63-7/16 after the company announced Thursday it will launch a new service dubbed "dot com directory" in July. Listings in the domain directory will be free for NSI registrants, although those who go through competitors will pay an unspecified fee.
The session was also unkind to online brokers with Ameritrade Holding Corp. (AMTD) losing 3-13/16 to 79, E*Trade Group Inc. (EGRP) lost 1-3/4 to 37-3/4, National Discount Brokers Group Inc. (NDB) dropped 1-13/16 to 39-13/16 and DLJdirect (DIR) lost 1-1/2 to 27-1/2.
The day's biggest success story was Phone.com Inc. (PHCM) soared 24-1/8 to 40-1/8 on its first day of trading. The company, which manufactures software that allows wireless phone companies to offer Internet services to their customers, sold 4 million shares at $16 each Friday raising $64 million.
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