Internet Stocks Surge As Rate Picture Clarifies

Internet issues moved higher Thursday despite some hints from Federal Reserve Chairman Alan Greenspan that a small interest rate hike is in the cards.

Many economists are expecting a hike of about one-quarter percent. Many Internet analysts are downplaying the move, saying it’s already been factored into the sector.

Just before noon,’s Internet Stock Index had climbed 23.38, or 4.89 percent, to 501.28, the Nasdaq Composite had gained 29.45 to 2,547.28 and the Dow Jones industrial average was up 6.65 to 10,791.60.

All the sector’s leaders were higher including America Online Inc. (AOL), up 6-5/16 to 112-3/16. Shares continued to benefit from Merrill Lynch Internet analyst Henry Blodgett reiterating his “buy” rating earlier this week.

CMGI Inc. (CMGI) had jumped 10-5/8 to 103-3/4. BancBoston Robertson Stephens Thursday upped its rating on the stock to “buy” from “long-term attractive.”

The firm also reinitiated coverage of Excite@Home (ATHM) with a “buy” rating. That sent shares up 6-1/8 to 53-1/2. Inc. (AMZN) jumped 6-1/16 to 117-3/4 as shares continued to benefit from Wednesday’s announcement that the firm is paying $45 million for a stake in upscale auction house Sotheby’s.

Other big gainers included Critical Path (CPTH), soaring 9-3/16 to 46-1/16 and online community Inc. (BOUT) which had jumped 8-3/16 to 39-7/16.

Inktomi Corp. (INKT) jumped 7-13/16 to 116-5/8. Inktomi shares have been on an upward march since announcing a new directory engine Tuesday.

Internet providers continued to do well, with MindSpring Enterprises (MSPG) up 1-15/16 to 66-13/16, EarthLink Network Inc. (ELNK) up 3-1/8 to 44-1/8 and PSINet Inc. (PSIX) up 3-1/2 to 42-1/4.

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