Internet Issues Break Away from Blue Chips

Internet stocks were sharply higher in midday trading Thursday as investors were taking money out of blue chips which have been on a torrid pace of late.

Just before noon,’s Internet Stock Index was up 10.80, or 2.11 percent, to 523.43, the Nasdaq Composite had climbed 6.42 to 2,812.02 and the Dow Jones industrial average was off 57.62 to 11,268.42.

Shares of Cisco Systems Inc. (CSCO) were up 1-5/16 to 69-15/16. The company Thursday purchased networking companies Cerent Corp. and Monterey Networks for $7.4 billion in stock.

Web community Corp. (XMCM) was up 1-1/16 to 41-3/4. The company Thursday bought e-mail security comapny Private One Inc. Terms of the deal were not disclosed.

PSINet Inc. (PSIX) had climbed 1-1/4 to 52-5/8 and Transaction Network Services Inc. (TNI) was up 5/16 to 46-1/4. Allegations of insider trading have brought PSINet’s $720 million purchase of TNI under review.

CMGI Inc. (CMGI) had jumped 7-3/16 to 92-1/8 after Prudential Security’s Paul Merenbloom reiterated his “strong buy” rating.

Net2Phone Inc. (NTOP) continued its recent run-up Thursday, climbing another 17-1/2 to 87-5/8. Shares continued to benefit from Net2Phone’s deal with Sprint Corp. to offer low-cost phone calls to Asia. (MDCM) was up 2-1/8 to 17-1/2. The online mortgage lender’s second-quarter loss increased to $1 a share compared to 14 cents a year ago. However, revenues jumped 66 percent to $14.3 million.

Broadcom Corp. (BRCM) fell 1-9/16 to 132-1/8. Shares were not benefitting from Thomas Weisel initiating coverage with a “buy” rating.

Other movers included America Online Inc. (AOL), up 1-1/8 to 104-3/8, Inc. (PCLN) jumped 8-13/16 to 74, Efficient Networks (EFNT) up 2-1/16 to 56-11/16 and Rhythms Netconnections Inc. (RTHM) had climbed 3-3/4 to 46.

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