Fed Watch & Wedding Bells

Investors were treated to a positive close, despite anemic volume ahead of
the Fed’s Open Market Committee meeting tomorrow. The markets already
anticipate a half point rate hike, and investors appear to have factored it

The real story will show itself in the Fed’s statement following the rate
increase. Whether we’ll see a return to a neutral bias or revisit a
tightening stance is likely to set the tone for tomorrow’s trading day.

Internet.com’s ISDEX rocketed higher by 4.10%. Consumer cyclicals urged the
NYSE higher by 198.41 to 10,807.78, while Web stocks dragged the Nasdaq
into positive territory kicking and screaming, up 78.62 to 3,607., on the
lightest volume year-to-date.

Shares of Lycos roared 7-1/2 to 61-5/8 on
continued speculation over merger talks with Terra Networks . The current deal gives one and half shares of Terra for each
share of Lycos, valuing the U.S. portal at roughly $90 per share. Both
sides are busily working toward a speedy courtship in an effort to avoid a
prolonged rumor mill and a possible backlash from its shareholders. Look
for a deal to wrap up by week’s end.

NetObjects leapt 1-9/16 to 12-<, after the software developer announced a distribution deal with Big Blue. The maker of the once popular, but now struggling Fusion software suite will put its Web site design package on IBM’s PCs and Net

Wit Capital crept 1-5/16 to 11-9/16 after the
fledgling underwriter announced plans to acquire E*Trade’s E-Offering unit. In a stock swap arrangement, Wit will give up
a 25% stake and its more than 100,000 brokerage accounts to E*Trade and
concentrate on its underwriting duties and follow-on offerings.

Other Net financials climbed higher in sympathy with the consolidation
news. Discount brokerage giant Charles Schwab
tacked on 1-7/16 to 43-3/8. Night/Trimark added
3-5/16 to 31-3/4, while shares of Ameritrade
rallied 5/8 to 14-9/16.

Shares of Priceline taxied down the runway,
easing 3/4 to 50-7/16, after the name-your-own-price Web site announced its
president and chief operating officer, Daniel Schulman, has been promoted
to company CEO, replacing Richard Braddock who will move to role of chairman.

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