Internets Power Past Blue Chips

Upgrades for several Internet leaders along with a report that Merrill Lynch will soon unveil a new unit trust of Internet stocks helped the sector gain late-day steam and power past blue chips.

internet.com’s Internet Stock Index soared 26.67, or 5.41 percent, to 519.35, the Nasdaq Composite jumped 37.08 to 2,858.18 and the Dow Jones industrial average closed off 75.03 to 10,523.44.

Late in the day, rumors emerged that Merrill would soon unveil a $1.2 billion unit trust consisting of many Internet leaders. Unit trusts are managed investments that pool money from a large group with the goal of minimizing risk. Investors in a unit trust agree to commit a specific amount of money each month. Unit trusts are attractive because investors can opt to cash in their units with no tax penalty which makes them more attractive than stocks and mutual funds.

Climbers included DoubleClick (DCLK) which climbed 10-3/8 to 118-7/8. Banc of America Securities initiated coverage Wednesday with a “buy” rating. The firm set a $140 price target.

Priceline.com Corp. (PCLN) climbed 4-25/32 to 71-5/8. Shares continued to benefit from Tuesday’s announcement that Priceline’s “name your price” concept will be extended to groceries.

Broadcom Corp. (BRCM) jumped 10-1/8 to 114-1/4 after Deutsche Bank upgraded the stock to a “strong buy” from a “buy” and set a $150 price target.

Broadvision Inc. (BVSN) rocketed 17-11/16 to 139 after Prudential Securities’ Donald Crook rated the electronic-commerce software maker a “strong buy” and set a $155 price target.

Exodus Communications Inc. (EXDS) jumped 7 to 80 percent after Legg Mason Wood Walker’s Todd Weller reiterated his “buy” and said he expects the stock to hit $126 in the next year.

Yahoo! Inc. (YHOO) climbed 9-15/16 to 179-1/2 after Merrill Lynch’s Henry Blodget reiterated his near-term “buy” and set a $225 price target.

On the IPO front, shares of Kana Communications Inc. (KANA) rocketed 36-1/2 to 51-1/2. The e-commerce software provider sold 3.3 million shares at $15.

MindSpring Enterprises Inc. (MSPG) rose 6-1/2 to 32-7/8 after signing a deal with Ceridian Corp.’s small business solutions unit. The two companies will provide Internet solutions to their small business customers.

Other strong gainers included America Online Inc. (AOL) gained 6-1/8 to 91, Ariba Inc. (ARBA) jumped 16-5/16 to 149-1/2 and Inktomi Corp. (INKT) gained 9-1/16 to 138-5/16.

One of the day’s biggest losers was Bottomline Technologies (EPAY) which had plunged 8-1/2 to 16-1/2. The Internet bill payment firm warned Wednesday it will post a loss of up to 10 cents a share in its fiscal first quarter. Analysts had been forecasting an 8-cent profit.

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