RealTime IT News

Interest Rate Hike Drives Market Up

Internet stocks surged higher after the Federal Reserve's Open Market Committee raised the federal funds and discount rate one-quarter percent.

The recent slump in tech-related issues and positive reaction today demonstrates that investors had anticipated such a move for quite some time. In addition, two IPOs boosted Internet issues higher.

internet.com's Internet Stock Index was up 43.72, or 4.46 percent, to 1,022.91, the Nasdaq Composite rose 101.70 to 4711.70 and the Dow Jones industrial average, supported by strength in financial stocks, climbed 227.10 to 10907.34.

Caldera Systems (CALD) priced 5 million shares at $14 each with lead underwriter Robertson Stephens. Shares of the Linux software e-tailer jumped 15-7/16, or 110 percent, to 29-7/16.

Snowball.com (SNOW) priced 6.25 million shares at $11 each with lead underwriter Goldman Sachs. Shares rose 4-5/16 to 15-5/16. Snowball is a portal that targets "Generation I" (13-30 yr olds), the Internet generation.

E-commerce plays got good news Monday when a committee advising Congress on e-commerce issues approved a recommendation that would not implement any new taxes on Internet purchases. However, the group failed to approve the proposal by a two-thirds majority which means it will not be in the official report set to be submitted to Congress in late April.

Amazon.com Inc. (AMZN) was up 8-3/16 to 72-3/8, eBay Inc. (EBAY) rocketed 18-3/8 higher to 214-1/2 and Ticketmaster-Citysearch (TMCS) added 5/8 to 26-1/2.

Ask Jeeves Inc. (ASKJ) rose 9-1/8 to 71. US Bancorp Piper Jaffray Tuesday initiated coverage of the stock with a "strong buy." The firm expects Ask Jeeves to hit $193 in the next year.

Macromedia Inc. (MACR) gained 3-7/64 to 83-7/64. The maker of Web design software will be added to the S&P MidCap 400 index.

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