Internet Stocks Surge To Open Week
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Internet stocks had a strong showing Monday thanks to a wave of news from leading Internet portals and and a high-speed pact between America Online Inc. and Hughes Electronics.
internet.com's Internet Stock Index jumped 29.30, or 5.93 percent, to 523.17, the Nasdaq Composite soared 66.84 to 2,630.28 and the Dow Jones industrial average shed 39.58 to 10,815.98.
America Online Inc. (AOL) added 3-3/4 to 115-3/4 on news that it will invest $1.5 billion in General Motors Corp.'s Hughes Electronic Unit. The companies are teaming to provide high-speed satellite Internet access to AOL subscribers and increase the presence of AOL TV.
Also, Merrill Lynch's Henry Blodgett reiterated his "buy" rating on the stock. Blodget cited AOL's plans to expand its reach in Asia. He also believes the company will launch a free Internet service targeting Europeans.
Yahoo! and Japan's Softbank also reportedly plan to spend $8.2 million on their Yahoo! Japan joint venture through the year 2000. That's five times higher than the amount spent through March 31 of this year.
Excite@Home Corp. (ATHM) gained 5-7/16 to 57-7/8. On Monday, the company partnered with General Magic to offer Excite Voicemail. Excite also inked a deal with Lipstream to offer its members real-time voice conversations over the Internet.
Online brokers also did well. E*Trade Group Inc. (EGRP) gained 5-11/16 to 40-11/16. The company partnered with AT&T to offer six months of Internet access to new E*Trade customers. DLJdirect (DIR) added 2-11/16 to 31-1/4 after Merrill Lynch initiated coverage with near and long-term "accumulate" ratings and Ameritrade Holding Corp. (AMTD) soared 16-13/16 to 89-3/4.
Online music retailer CDNow Inc. (CDNW) added 1-11/16 to 17-1/16. Reports over the weekend indicated Deutsche Telekom is eyeing a $100 million investment in the company. Based on Friday's market cap, that would represent a 22 percent stake.
Other strong movers included Amazon.com Inc. (AMZN) up 12-3/16 to 123-1/2, CMGI Inc. (CMGI) added 3-1/2 to 103 after BancBoston Robertson Stephens raised its rating to "buy" from long-term "attractive." The firm expects CMGI-funded Engage Technologies and NaviSite to launch successful initial public offerings this summer.
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