RealTime IT News

Net Stocks Give Back Monday's Gains

Internet stocks gave back all of Monday's gains on Tuesday, as an earnings miss from S1 Corp. and an earnings warning from 24/7 Media fueled investor concerns about the health of the sector.

The ISDEX fell 24 to 693, a critical support level, and the Nasdaq dropped 81 to 3685. But blue chips rose despite a dismal earnings forecast from Procter & Gamble. The S&P 500 added 7 to 1438 and the Dow rose 84 to 10,606. Volume declined to 920 million shares on the NYSE and 1.33 billion on the Nasdaq. Advancers led by 16 to 11 on the NYSE, but decliners led 23 to 16 on the Nasdaq. The purchasing manager's survey for July came in unchanged at 51.8, ending a four-month decline, and holding above the important level of 50 that signals economic expansion. But the prices paid component came in higher than expected, raising mild inflation concerns. The big economic report for the week is Friday's July employment data. For earnings reports, visit our earnings calendar and reported earnings.

S1 Corp. lost 28%, falling 7 1/8 to 18 5/16. The company reported a second-quarter loss of $2.82 that missed analysts' estimates by 8 cents.

24/7 Media led Internet advertising stocks lower after announcing that 3rd quarter sales will be less than expected because Web-related companies are buying fewer ads. 24/7 lost 2 1/2 to 9 3/4, DoubleClick fell 2 3/16 to 33 3/4, and Engage declined 7/64 to 9.

Companies continued to report earnings after the bell on Tuesday.

Sapient reported second-quarter earnings of 23 cents a share, 3 cents better than estimates, and announced a 2-for-1 stock split. The stock declined 9 7/8 to 103 7/8 in regular trading and changed hands at 109 after hours. GoAmerica beat estimates by a penny with a 22-cent loss. The stock lost 1 1/8 to 10 5/8 in regular trading and rose slightly after hours.

Click Commerce reported a loss of 1 cent a share, 4 cents better than estimates. The stock fell 1 3/4 to 29 11/16 in regular trading and changed hands at 30 after hours. Salon.com beat estimates by a nickel with a 36-cent loss. The stock gained 1/8 to 1 1/2 but did not cross after hours. Viador beat estimates by 3 cents with a 29-cent loss. The stock gained 7/16 to 11 1/16 in regular trading and did not change hands after hours.

A large bet that Cisco Systems will report unimpressive earnings next week didn't help tech stocks during the day. Cisco declined 1 3/4 to 63 11/16 on news that someone had purchased 56,000 puts, or bets that the stock will fall, representing 5.6 million shares. The company reports earnings next Tuesday. Cisco also announced its latest acquisition, IPmobile, for $425 million.

Exodus and Digex were both the subject of takeover rumors. Exodus gained 2 3/16 to 46 5/8, and Digex bolted 8 15/16 to 72. Digex beat estimates by 2 cents after the bell on Monday with a 54-cent loss, and a bullish conference call also helped the stock.

Ariba slipped 2 13/16 to 113 1/8 despite news of an alliance with Lucent . Technical note: Ariba, a leader in the ISDEX's recent gains, barely maintained its uptrend during last week's selling, piercing it on an intraday basis. Competitor Commerce One , which experienced a failed breakout recently, is sitting right on its uptrend line at 40 3/8. One stock that did break its uptrend, Vignette , continued to show weakness, slipping another 4 11/16 to 29 3/16. The stock bottomed at 23 in May.

Red Hat gained 1/4 to 19 on news of an alliance with Ericsson.