Greenspan Sends Internet Stocks Lower

Federal Reserve Chairman Alan Greenspan sent markets lower across the board after he expressed concerns that the tightening U.S. labor market could halt the nation’s economic growth and bring a sustained period of low inflation to a close.’s Internet Stock Index fell 27.66, or 4.84 percent, to 544.12, the Nasdaq Composite tumbled 60.92 to 2,473.53 and the Dow Jones industrial average slumped 19.18 to 10,936.23.

The day’s gainers included AT&T Corp. (T) which gained 5 to 61-15/16. Microsoft Corp. (MSFT) announced Thursday it will invest $5 billion in AT&T. The two companies will work together on a number of next-generation broadband and Internet services projects.

The non-exclusive agreements also call for AT&T to increase its use of Microsoft’s Windows CE platform for advanced set-top devices.

@Home Corp. (ATHM) slumped 1-3/16 to 153-3/4. AT&T’s purchase of MediaOne Group has rekindled speculation that @Home will merge with Time Warner’s Road Runner.

America Online Inc. (AOL) dropped 9-5/8 to 120-1/8 as investors continued to worry about the No. 1 online service’s broadband strategy.

DSL provider NorthPoint Communications Inc. (NPNT) climbed 3-1/8 to 43-3/8 on its first full day of trading. The company sold 15 million shares at $24 each on Tuesday, raising $360 million.

Online System Services Inc. (WEBB) added 1-11/16 to 14-5/16 Thursday. The company, which markets tools that helps companies create Web sites, was reiterated a “buy” by EBI Securities Corp.

It was the same story for Internet IPOs Thursday. Portal Software Inc. (PRSF) rocketed 23-3/8 to 37-3/8 after hitting 44 earlier in the day. The company sells billing solutions to Internet providers. On Wednesday, Portal sold 4 million shares at $14 each, raising $56 million.

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