Stocks were up across the board in midday trading Thursday, although Internet stocks were lagging behind the other indices as investors were punishing the sector over a cloudy earnings outlook.
Just before noon Eastern, internet.com’s Internet Stock Index had gained 6.33, or 1.17 percent, to 545.12, the Nasdaq Composite had risen 49.57 to 2,852.09 and the Dow Jones industrial average had jumped 203.58 to 10,598.47.
The Dow was being helped by statistics from the Labor Department which reported labor costs increased at a slower rate in the third quarter. The employment cost index grew 0.8 percent in the third quarter after jumping 1.1 percent in the second. Analysts had forecast a 0.9 percent hike. The smaller-than-expected climb may provide more cause for the Federal Reserve to stay pat on interest rates, economists said.
Among Internets, the big loser was Amazon.com Inc. (AMZN) which had tumbled 4-9/16 to 71-3/8 after being as low as 65-7/8. The Internet retail giant late Wednesday said its third-quarter loss increased to 59 cents a share compared to 15 cents a year ago. The company attributed the lower results to increased ad and technology spending.
As a result, Merrill Lynch cuts its intermediate rating to “accumulate” from “buy.” CS First Boston also increased its fiscal 1999 loss estimates to $356 million from $311 million.
Also trading lower was eBay Inc. (EBAY) off 1-11/16 to 137. The online auctioneer’s sales dropped to $96 per user in the third quarter, down from $150 a year ago. That came despite a 509 percent hike in registered users.
It wasn’t all bad across the sector, however. Gainers included Internet Capital Group Inc. (ICGE) up 6-1/2 to 120. The Internet holding company Thursday took a $50 million stake in privately-held eMerge Interactive Inc. eMerge, which helps farmers sell cattle over the Web, is the company’s largest purchase to date.
Paradyne Networks Inc. (PDYN) gained 2-1/8 to 33-3/16. The high-speed networking equipment maker reported third-quarter earnings of 6 cents, up from a loss of a penny a year ago.
Verio Inc. (VRIO) was off 1/8 to 36-1/8. The company, which hosts Web sites and provides Internet access to businesses, reported a loss of 61 cents a share in the third quarter, up from 52 cents a year ago. Revenue nearly doubled, however.
Online broker Ameritrade Holding Corp. (AMTD) was off 5/16 to 16-11/16. The company reported a fourth-quarter loss of 5 cents a share, in line with expectations. However, it was lower than year-ago results when the company earned 3 cents a share.
Interactive ad company Modem Media Poppe Tyson (MMPT) had jumped 6-15/16 to 69-7/16 after the company reported earnings of 11 cents a share in the third quarter compared to a 15-cent loss a year ago. Those results were much higher than forecasts calling for a 4-cent profit.
Finally, F5 Networks (FFIV) was off 3-3/4 to 133-1/4 after surging more than 37 points on Wednesday. The company, whose products help Web sites manage traffic, reported a net income of $2.3 million, or 11 cents a share in its fiscal fourth quarter. That beat expectations of a 5-cent profit.
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