Internet Investors in Sell Off Mode

Internet stocks were falling across the board in midday trading Wednesday, one day after the Federal Reserve hiked short-term interest rates by a half percent in an effort to slow down the surging economy. Observers speculate part of the reason for the sell off are fears more hikes may be on the way.

At 11:45 a.m. Eastern, internet.com’s Internet Stock Index was off 24.80, or 3.37 percent, to 710.67, the Nasdaq Composite had lost 94.54 to 3,623.03 and the Dow Jones industrial average had lost 169.54 to 10,765.03.

Of all the issues in the ISDEX, only Verio Inc. and Sportsline Inc. were in positive territory. Even there, the gains were less than a point.

Movers included Spanish ISP Terra Networks , off 3-13/16 to 49-3/4 and Lycos Inc. had lost 7-1/4 to 65-3/8. Terra late Tuesday bought the search engine in a deal worth more than $12 billion.

Merrill Lynch Wednesday lowered Terra’s intermediate rating to “neutral” from “accumulate” and UBS Warburg downgraded Lycos to “hold” from “buy” as did Jefferies & Co.

Autoweb.com Inc. jumped 1-5/16 to 4-7/8. The online car shopping site Wednesday sealed an alliance with America Online Inc. . Autoweb.com will license its automotive content and technology to AOL for the next four years.

GlobeSpan Inc. was up 1-3/4 to 99-13/16. The maker of semiconductors for Internet access equipment Wednesday bought privately-held iCompression for $392 million in stock. It will use iCompression’s products and technology in new high-speed products.

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