Internet stocks closed lower Friday as investors gear up for a slew of earnings next week from many of the sector’s leaders.
internet.com’s Internet Stock Index lost 9.47, or 1.69 percent, to 551.07, the Nasdaq Composite gained 25.13 to 2,864.50 and the Dow Jones industrial average jumped 23.43 to 11,209.84, setting a new record.
Paradyne Networks (PDYN) rocketed 39-1/4 to 56-1/4 on its first day. The broadband equipment maker priced 6 million shares at $17 late Thursday, raising just over $100 million.
The company’s solid debut comes on the heels of a blowout performance from Efficient Networks (EFNT) which ended up 7-9/16 to 58-11/16. Efficient went public Thursday at $15 and soared 240 percent on their first day of trading.
Also going public Friday was Audible (ADBL), up 12 to 21. The company, which provides audio versions of books and newspapers over the Internet, sold 4 million shares at $9, raising $36 million.
The sectors leaders were mixed with America Online Inc. (AOL) losing 1-7/64 to 119-57/64. AOL is among the companies reporting next week.
In his weekly Web report, BancBoston Robertson Stephens’ Keith Benjamin said he believed AOL is poised for a rise as the company continues its efforts to make the service available on a variety of platforms.
He expects AOL to add 750,000 members in the quarter and for electronic commerce revenue to beat estimates.
“We believe AOL will continue to control more shopping than anyone else because it has more time to incite impulse buying,” he wrote.
Benjamin also said investors have been missing the impact AOL’s combined reach will have on its growth and profitability. AOL’s powerful metrics, Benjamin said, will help the company in its efforts to gain access to cable networks.
Analysts expect AOL to earn 11 cents a share, up from 6 cents a share a year ago. Sales are expected to jump 70 percent to $1.34 billion.
Amazon.com Inc. (AMZN) lost 1-15/16 to 137-5/8, DoubleClick Inc. (DCLK) slumped 1-3/4 to 100-1/8 and eBay Inc. (EBAY) dropped 4-1/32 to 122-31/32.
In addition to AOL and Amazon.com, Excite@Home, DoubleClick, Xoom.com, Infoseek, Beyond.com, NetGravity, Onsale, Preview Travel and Network Solutions are set to report earnings next week.
Microsoft Corp. (MSFT) climbed 5-1/16 to a record 99-7/16 on reports it may separate its Internet businesses and create a tracking stock that would follow their performance.
Also on Friday, a jury in Bridgeport, Conn., ruled the software giant didn’t violate federal antitrust laws in contract negotiations with software firm Bristol Technology. Microsoft was accused of engaging in predatory practices in negotiations over its source code. The jury did rule Microsoft violated Connecticut law governing deceptive business practices. However, it only fined Microsoft $1.
Allaire Corp. (ALLR) rose 4 to 67. The maker of Web building software reported a lower-than-expected quarterly loss and said revenues doubled.
CyberSource Corp. (CYBS) slumped 3-5/16 to 30 after rocketing to 43 earlier in the session. The Internet transaction processor was mentioned in Business Week’s “Inside Wall Street” column which speculated the company could be a takeover target. One possible suitor, the magazine said, could be credit card giant Visa International Inc.
Brokerage Charles Schwab (SCH) slumped 2-15/16 to 52-7/16. The company reported second-quarter earnings of 18 cents a share compared to 9 cents a year ago. Those results beat analyst estimates by a penny.
However, the company warned its margins and the number of daily trades its customers are executing have fallen.
Elsewhere in the sector E*Trade Group Inc. (EGRP) ended off 1-1/2 to 37-1/2, National Discount Brokers Group Inc. (NDB) fell 3 to 48-3/8, and Southwest Securities Group Inc. (SWS) lost 1 to 60-13/16.
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