Investors Cheer Jobs Report, Send Cobalt Soaring
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U.S. stocks had posted solid gains across the board by midday as investors were applauding news that the U.S. jobless rate had hit a 30-year low. Investors were still proving to have a hearty appetite for Internet infrastructure plays, sending shares of Cobalt Networks soaring almost six-fold less than two hours after the issue's debut.
Just before noon Eastern, internet.com's Internet Stock Index had climbed 10.17, or 1.76 percent, to 589.49, the Nasdaq Composite had jumped 42.90 to 3,098.85 and the Dow Jones industrial average was up 94.81 to 10,734.45.
Markets were cheering news that the U.S. jobless rate fell to 4.1 percent and wages rose less than expected, easing inflation fears. October's unemployment rate was the lowest since 1970, falling from 4.2 percent in September. The U.S. added 310,000 jobs in October following gains of 41,000 in September. Wages only rose a penny to $13.37 an hour.
The day's big success story was Cobalt Networks Inc. (COBT) The company, which develops server appliances for electronic commerce, had skyrocketed 106-5/8 to 128-5/8. The company sold 5 million shares at $22 each. Underwriters were Goldman Sachs & Co. Merrill Lynch & Co., BancBoston Robertson Stephens and SoundView Technology Group.
In other sector news, CMGI Inc. (CMGI) was up 13/16 to 105-1/4 and Lycos Inc. (LCOS) had climbed 2 to 59. The Wall Street Journal reported Friday CMGI recently made another effort to buy the search engine although talks ended a few weeks ago after the two sides couldn't come to acceptable terms.
Also Friday, Lycos sealed a deal with Japan's Kadokawa Shoten Publishing Co. Ltd. which will bring content to Lycos Japan. Tripod Japan, a free Web page hosting service, launched earlier this week and has already signed up more than 10,000 members, the company said.
Online brokers were mixed Friday following a report from U.S. Bancorp Piper Jaffray. Online brokerages added 1.1 million accounts in the third quarter, although the average number of daily online trades fell 7.8 percent from the second quarter. Also, a wave of ratings updates from CS First Boston was moving the group.
Charles Schwab Corp. (SCH) was off 3/16 to 41-13/16 on news that it continues to lose market share to rivals, although it still holds the top position in the market with a 23.3 percent share. CS First Boston initiated coverage of Schwab with a "hold."
E*Trade Group Inc. (EGRP) was up 9/16 to 31-15/16. That firm led the pack adding new accounts, with 310,000 in the quarter. It came in second in terms of trading volume to Schwab. E*Trade was also started by CS First Boston with a "hold" as was Ameritrade Holding Corp. (AMTD), up 1-9/16 to 20-5/8.
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