A better-than-expected consumer price index report lifted stocks higher across the board Wednesday, leaving Internet shares big beneficiaries. The tech-heavy Nasdaq Composite also posted its largest one-day gain ever.
internet.com’s Internet Stock Index shot up 45.66, or 10.56 percent, to 477.90, the Nasdaq Composite soared 103.18 to 2,517.85 and the Dow Jones industrial average gained 189.96 to 10,784.95.
Markets were helped by a report that consumer prices were unchanged in May. That sent bond prices higher and interest rates lower. Internet issues also benefitted from a report from Lehman Brothers Internet analyst Brian Oakes who said most of the sector’s issues may have hit bottom. He attributed the decline to interest rate fears and not the fundamentals of Internet leaders.
Oakes said once the rush of Internet IPOs subsides, there will be several good buying opportunities.
All but two of the issues in the ISDEX ended in positive territory Wednesday. Among those leading the way were Amazon.com Inc. (AMZN) which gained 15-3/16 to 111-11/16. The company sealed a venture with auction house Sotheby’s Holdings to sell art and collectibles online. Amazon will invest $45 million in Sotheby’s and purchase $35 million in Sotheby stock.
America Online Inc. (AOL) jumped 11-13/16 to 106-9/16. On Monday, shares slumped to about 50 percent off their all-time highs. The company Wednesday expanded an alliance with Compaq Computer Corp to bundle its access software with new Compaq Presario computers. The models will also be DSL ready.
Online brokers were also higher across the board. Ameritrade Holding Corp. (AMTD) gained 10-1/4 to 75, E*Trade Group Inc. (EGRP) added 3-5/8 to 35-5/8, National Discount Brokers Group Inc. (NDB) gained 3-3/4 to 38-3/4 and DLJdirect (DIR) jumped 3-5/8 to 27-15/16.
Digital Subscriber Line provider NorthPoint Communications Group Inc. (NPNT) climbed 4-3/4 to 36-1/2 after announcing Level 3 Communications had agree to sell its DSL service in six U.S. markets.
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