Nets Come Off Lows in Rough Session
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Internet shares took a back seat to blue chips Thursday as the Dow rocketed past both the ISDEX and the Nasdaq. A number of companies did bounce off their lows even though a leading Internet analyst wrote the worst was likely over for most Net stocks.
internet.com's Internet Stock Index lost 10.80, or 1.49 percent, to 715.04, the Nasdaq Composite shed 62.53 to 3,643.88 and the Dow Jones industrial average jumped 169.09 to 10,844.05.
Morgan Stanley Dean Witter's Mary Meeker said several Internet stocks show compelling value. Still, she estimates half the companies in the sector will never truly recover. Meeker said growth in Internet usage shows no signs of slowing and financially-rewarding companies will continue to do well. Early-stage companies will remain risky for the near-term, she believes, as they will have a much harder time attracting financing than established names.
A number of leaders were under pressure, including Amazon.com Inc. (AMZN), lost 1-1/16 to 52-3/8, CMGI Inc. (CMGI) tumbled 2-3/4 to 57-11/16, eBay Inc. and Exodus Communications (EXDS) closed off 4-3/16 to 107-11/16.
Excite@Home (ATHM) closed off 2 to 17-5/16. The cable Internet provider and portal company reported a first-quarter loss of $4.6 million, or 1 cent a share. Analysts had expected a break-even quarter. The company also warned it will lose money in 2000 as it increases spending to grow its subscriber base.
Extreme Networks Inc. (EXTR) dove 14-5/16 to 65-1/8. The high-speed networking company reported third-quarter earnings of 16 cents a share, 4 cents better than estimates.
Turning to good news, the day's only IPO had a good day. 360networks Inc. (TSIX) jumped 5 to 19. The fiber-optic telecommunications firm sold 44.6 million shares at $14.
Terayon Communication Systems Inc. (TERN) gained 4-9/16 to 85-7/16. Cablevision Systems Corp. reached a deal with the high-speed modem maker to market its products in The Wiz electronics stores in New York, New Jersey and Connecticut.