Internet Investors Finally Cheering

For the first time in more than a week, Internet stocks were back in favor on Wall Street as many were moving back into stocks that have bit hit hard recently and now have more reasonable valuations.

At 11:30 a.m. Eastern,’s Internet Stock Index had gained 16.10, or 2.62 percent, to 631.53, the Nasdaq Composite was up 81.49 to 3,352.10 and the Dow Jones industrial average had lost 26.39 to 10,508.96.

Stocks moving upward included LookSmart , jumping 2-5/16 to 15-3/16. Merrill Lynch’s Henry Blodget initiated coverage with a short-term “accumulate” and long-term “buy,” saying the search company is one of a few in the sector with a true competitive advantage. Inc. had jumped 3-3/16 to 40-5/16. The company Thursday formed a partnership with American Express Co. that will sell business products and services online. The venture’s first new offering, unveiled late Wednesday, was long-distance telephone calls.

Chinadotcom Corp. was up 3/4 to 27-3/4. The provider of Asian news Thursday announced plans to invest $250 million in the Chinese market over the next two years. The company said China’s entry into the World Trade Organization makes the country a more attractive place to do business. Networks Inc. was off 3/32 to 4 after falling 13.8 percent Wednesday. The company’s chief financial officer resigned to take a position with an unnamed Internet start-up.

Online brokerages, which have been battered of late, were recovering slightly Thursday. That came despite a warning from CIBC which cut its estimates on all the leading brokerages over concerns of declining trading volume. E*Trade Group Inc. was up 1-3/8 to 15-5/16. The company also announced Jerry Gramaglia had been named president and chief operating officer, succeeding Kathy Levinson.

Others named by CIBC included Ameritrade Holding Corp. , up 9/16 to 11-3/4, Charles Schwab Corp. , up 7/8 to 39-3/8 and Knight Trading Group Inc. , unchanged at 27-5/8.

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