Fed Decision Causes Stocks To Turn Back

Stocks gave back some of their gains Tuesday after the Federal Reserve hinted it will consider tightening interest rates in the future.

The Fed left interest rates unchanged in its monthly meeting Tuesday, although policy makers hinted they may soon rise. That caused the Dow to lose gains of more than 50 points and close down 16.52 to 10,836.95, the Nasdaq Composite shed 3.49 to 2,558.35 and internet.com’s Internet Stock Index closed off 6.07, or 1.05 percent, to 572.93.

The biggest ISDEX gainer was Broadcom Corp. (BRCM). The communications chip maker closed up 7-5/8 to 98-3/8. Morgan Stanley Dean Witter Discover Tuesday increased its price target on Broadcom to $120 from $95.

Shares of Lycos Inc. (LCOS) gained 4-7/16 to 112-7/8 after the company said it was taking a 9 percent stake in online auction company FairMarket Inc. Lycos is the latest in a series of Web sites to add auction capabilities.

After the bell, Lycos reported a 2-cent loss for its latest quarter, a penny better than expectations. The company also set a 2-for-1 stock split.

Amazon.com Inc. (AMZN) lost 5 to 132-5/8. Earlier Tuesday, Amazon announced it was taking a 35 percent stake in Homegrocer.com.

Books-A-Million (BAMM) rose 1-29/32 to 10-5/8. The bookseller, which also sells over the Web, fired the latest salvo in the price wars Tuesday. Books-A-Million said it would discount titles on The New York Times bestseller list by 55 percent.

Amazon.com, Barnes & Noble and Borders announced 50 percent discounts Monday.

Shares of Efax.com Inc. (EFAX) lost 1-5/16 to 17-3/4. The company, which markets software that converts faxes to e-mail, said President and Chief Operating Officer Rob Pollock was resigning immediately.

The most solid performer of the day was IPO Redback Networks (RBAK) which shot up 61-1/8 to 84-1/8. The company, which makes communications products for high-speed Internet access, sold 2.5 million shares at 23 on Monday, netting $57.5 million.

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