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RealTime IT News

Tale of Two Halves

Markets fell victim to a steep sell-off in early morning trade before bouncing off an inflection point that saw much of the losses erased by late-afternoon. Bargain hunters moved in on healthy volume after falling through key support levels to help stocks stabilize a shaky start to the week.

Bellwethers recovered well off their lows of the day as the NYSE managed to shed 84.30 to 10,542.55, while technology and Internet stocks saw a sharp rebound to send the Nasdaq easing 26.16 to 3,364.24. The ISDEX headed modestly higher, up 0.18% on the day.

Just like clockwork, the acquiring company's share price typically tumbles, while the acquiree's stock heads higher on news of a buyout. Such was the case with today's news of Vignette's $1.7 billion planned acquisition of e-commerce software developer OnDisplay . Vignette's stock fell 8-15/16 to 34-7/8, as shares of OnDisplay edged up 7/8 to 54-1/8.

Yet another example of divergent merger stocks took place when XML-based B2B software maker webMethods announced plans to acquire Active Software in a $1.3 billion stock-swap. WebMethods crumbled 15 to 72, lopping off $400 million in market cap, while Active Software climbed $6 per share early, before showing late-day weakness, retreating 15/16 to 32-1/16.

Even its announcement of a business-to-employee joint venture portal with Bank of America couldn't save shares of BroadVision , as the one-to-one software developer's stock plunged 3-15/16 to 38-13/16 on the news.

Soft volume numbers released by the Nasdaq showed signs of waning stock trade interest by investors victimized by recent market mood swings. On the heels of the data, online brokerages took it on the chin at the opening bell, but many investors came to their senses by the closing bell. Shares of discount giant Charles Schwab opened $4 lower, but managed to finish the day up 1/16 to 41-15/16, while E*Trade wasn't quite so fortunate, ending down 2-7/8 to 16-1/2.

Blue chip Nets were on the ropes early before coming out swinging to wrap up the day. Online auctioneer eBay briefly flirted with double digits in mid-afternoon before investors sent shares rocketing 18 to 136-3/16 by the close of trade. Shares of Yahoo! followed suit, opening near its low of the day, and finishing at its high up 5-5/16 to 126-1/4.