Another outage by online auctioneer eBay combined with a stronger-than-expected employment report caused Internet stocks to turn south in afternoon trading and erase all the day’s gains.
internet.com’s Internet Stock Index tumbled 12.91, or 2.98 percent, to 420.66, the Nasdaq Composite lost 17.86 to 2,547.97 and the Dow Jones industrial average slumped 79.79 to 10,714.03.
The Labor Department said the nation’s unemployment rate was 4.3 percent in July. The government also said 310,000 non-farm jobs were added in July. That’s much higher than the 199,000 economists were expecting.
eBay Inc. (EBAY) tumbled 9-5/8 to 83-1/4. The company’s site went down on Friday and was still not operational by late afternoon. eBay released a short statement blaming the situation on a network problem and said all auctions that would have ended between 7:20 a.m. Eastern to the time service is restored will be extended. Fees for auctions scheduled to end during the outage will be refunded.
Shares had been up slightly earlier in the day after Thomas Weisel Partners Friday reitereated its “market outperform.”
Goldman Sachs Internet analyst Michael Parekh Friday upgraded Yahoo!, putting the company on its recommended list. Parekh also reiterated his “buy” rating on AOL.
On Friday, AOL sealed partnerships with MindSpring Enterprises Inc. (MSPG) and EarthLink Network (ELNK). The two ISPs will make available co-branded versions of AOL’s Instant Messenger service to their subscribers. MindSpring added 2-13/16 to 28-13/16
The day’s only Internet IPO also slumped. Tumbleweed Communications (TMWD)only gained 1/16 to 12-1/16. The company, which provides secure Internet communications services, floated 4 million shares at $12. Credit Suisse First Boston was the lead underwriter.
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