Online Brokers Pull Down Sector
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Downgrades on two Internet brokerages were leading Internet stocks lower in mid-session Friday although a leading sector analyst was urging investors to jump back in.
Just before noon, internet.com's Internet Stock Index was off 9.42, or 1.85 percent, to 499.35, the Nasdaq Composite had fallen 12.04 to 2,762.58 and the Dow Jones industrial average had slumped 35.78 to 11,162.67.
Lehman Brothers' Richard Repetto lowered his ratings on both brokerages to "outperform" from "buy." Repetto said he was increasingly concerned about the rising cost of acquiring customers.
Elsewhere among the leaders, eBay Inc. (EBAY) had tumbled 3-1/2 to 124-15/16, CMGI Inc. (CMGI) had fallen 1-1/4 to 80-1/16, Excite@Home (ATHM) was off 3/4 to 40, Priceline.com Inc. (PCLN) was down 3/8 to 72-1/4 and Yahoo! Inc. (YHOO) had tumbled 3-1/16.
In his weekly Web report, BancBoston Robertson Stephens' Keith Benjamin said sector leaders appear to be on the rebound making now a good time for investors to add to existing positions and broaden their list of candidates.
Stocks that Benjamin feels are attractive include America Online, as well as e-tailers Priceline.com Inc., Amazon.com, Ebay and eToys. He also said CMGI is attractive for individuals who want to purchase a broad basket of Internet stocks and avoid some volatility.
The one bright spot in the sector was recent IPO Bamboo.com Inc. (BAMB). The company, which allows house hunters to view 3-D property images online, had jumped 5-1/8 to 22-11/16 in its second day of trading.
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