Internets Power Past Blue Chips
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Upgrades for several Internet leaders along with a report that Merrill Lynch will soon unveil a new unit trust of Internet stocks helped the sector gain late-day steam and power past blue chips.
internet.com's Internet Stock Index soared 26.67, or 5.41 percent, to 519.35, the Nasdaq Composite jumped 37.08 to 2,858.18 and the Dow Jones industrial average closed off 75.03 to 10,523.44.
Late in the day, rumors emerged that Merrill would soon unveil a $1.2 billion unit trust consisting of many Internet leaders. Unit trusts are managed investments that pool money from a large group with the goal of minimizing risk. Investors in a unit trust agree to commit a specific amount of money each month. Unit trusts are attractive because investors can opt to cash in their units with no tax penalty which makes them more attractive than stocks and mutual funds.
On the IPO front, shares of Kana Communications Inc. (KANA) rocketed 36-1/2 to 51-1/2. The e-commerce software provider sold 3.3 million shares at $15.
MindSpring Enterprises Inc. (MSPG) rose 6-1/2 to 32-7/8 after signing a deal with Ceridian Corp.'s small business solutions unit. The two companies will provide Internet solutions to their small business customers.
One of the day's biggest losers was Bottomline Technologies (EPAY) which had plunged 8-1/2 to 16-1/2. The Internet bill payment firm warned Wednesday it will post a loss of up to 10 cents a share in its fiscal first quarter. Analysts had been forecasting an 8-cent profit.
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