Internet Stocks Post Late-Day Rally
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Internet stocks staged a turnaround late in the session Monday as falling bond yields kept the sector afloat, prompting investors to come back to the stock market ahead of this week's key Federal Reserve meetings. Volume was once again extremely light with the New York stock exchange and the Nasdaq reporting their second-lightest day of the year.
internet.com's Internet Stock Index jumped 14.83, or 3.02 percent, to 505.64, the Dow Jones industrial average climbed 102.59 to 10,655.15 and the Nasdaq Composite gained 49.73 to 2,602.38.
America Online Inc. (AOL) gained 15/16 to 103-3/4 after slumping earlier. Merrill Lynch Internet analyst Henry Blodgett said the world's largest online service may not beat analysts' earnings estimates by as wide a margin as in the past. He cited the growing proliferation of free Internet access in Europe.
Internet ad firm DoubleClick Inc. (DCLK) ended up 3-3/16 to 79-1/8, reversing an earlier decline. AltaVista and CMGI both confirmed Friday the two are in talks that could lead to an AltaVista sale. Currently, AltaVista accounts for about 30 percent of DoubleClick's revenues. Many are speculating CMGI, which owns DoubleClick competitors Adsmart and Engage, would terminate AltaVista's deal and switch to its own solutions.
Healtheon Corp. (HLTH) lost 7-5/16 to 72-3/8 . Barron's is reporting that Microsoft, which owns a large stake in Healtheon, is looking to sell about 1.8 million shares before Healtheon's merger with WebMD goes through. Even after the sale, Microsoft would control 17.2 percent of Healtheon.
Late in the day, Microsoft issued a statement saying the shares that were tendered by existing WebMD shareholders. The company said it sold the shares to conform to substantial restrictions governing their sale. Microsoft said it "remains fully committed to WebMD and looks forward to the finalization of WebMD's merger with Healtheon."
Online broker Ameritrade Holding Corp. (AMTD) fell 2 to 83-1/2 after announcing it will sell $250 million in stock and $10 million in debt in a secondary offering. The money will be used to fund advertising and possible acquisitions.
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