RealTime IT News

Internets Gain Despite Hints Of Rate Hike

Internet issues moved higher Thursday despite some hints from Federal Reserve Chairman Alan Greenspan that a small interest rate hike is in the cards.

Economists are generally expecting a hike of about one-quarter percent. Many Internet analysts are downplaying the move, saying it's already been factored into the sector. Mary Meeker, Internet analyst at Morgan Stanley Dean Witter & Co. told that firm's sales force Wednesday's Internet run-up is an indication the worst is over.

She said Internet issues could gain momentum in July when second-quarter earnings reports will start appearing.

internet.com's Internet Stock Index gained 7.73, or 1.62 percent, to 485.63, the Nasdaq Composite added 26.35 to 2,544.18 and the Dow Jones industrial average ended up 56.68 to 10,841.63.

All the sector's leaders closed higher, although many gave back a portion of their gains late in the afternoon as blue chips made a surge.America Online Inc. (AOL), ended up 4-3/16 to 110-11/16. Shares continued to benefit from Merrill Lynch Internet analyst Henry Blodgett reiterating his "buy" rating earlier this week.

CMGI Inc. (CMGI) added 3-3/8 to 96-1/2. BancBoston Robertson Stephens Thursday upped its rating on the stock to "buy" from "long-term attractive."

The firm also reinitiated coverage of Excite@Home (ATHM) with a "buy" rating. That sent shares up 3-15/16 to 51-5/16.

Amazon.com Inc. (AMZN) added 1-1/4 to 112-15/16 after hitting 119-1/8 earlier. Shares were helped by Wednesday's announcement that the firm is paying $45 million for a stake in upscale auction house Sotheby's.

Other big gainers included Critical Path (CPTH), soaring 7-7/8 to 44-3/4 and online community About.com Inc. (BOUT) jumped 7-3/8 to 38-5/8.

Inktomi Corp. (INKT) jumped 4-3/16 to 113. Inktomi shares have been on an upward march since announcing a new directory engine Tuesday. Peter Ausnit of Volpe Brown Whelan & Co. initiated coverage of the stock with a "buy" rating.

Some national Internet providers continued to do well, with EarthLink Network Inc. (ELNK) up 1-1/8 to 42-1/8 and PSINet Inc. (PSIX) up 1-3/4 to 40-1/2.

eToys Inc. (ETYS) gained 2-1/2 to 40. Merill's Blodget initiated coverage with a "buy."

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