After lagging behind other stocks for most of the year, Internet tickers have been the top performers on Wall Street so far this month.
As we approach April’s half-way point, internet.com’s Internet Stock Index, or ISDEX, is up 3.8% since the end of March. The tech-heavy Nasdaq follows close behind with a 3.2% gain, with the Dow Jones showing a 1.4% increase and the S&P 500 registering a tiny 0.5% advance.
Since the Q1 earnings season promises to deliver results reflective of the current economic slowdown, it will be a challenge for stocks to stay in the black over the next couple of weeks. If they do, however, they will break a two-month string of deep losses. (This is hard to remember, I know, but in January the ISDEX actually was up 18% and the Nasdaq 12%.) Another solid day of trading Thursday will give investors a truly Good Friday when the market closes in observance of the annual religious holiday.
The ISDEX has been red-hot in the week of trading ended Wednesday, surging 31.6% with all 50 member stocks posting gains, ranging from Netegrity’s 74.4% to Terra Lycos’ 2.7%. Four of the top 11 movers are security companies, underscoring the traditional strength of this sector.
Let’s look at the top ISDEX stocks in the past week of action:
Netegrity — Though it’s down 44.5% in the year to date, the maker of network access security software has caught fire in recent days, bouncing off a 52-week low closing price of $17.27 on April 3 to finish Wednesday at $30.20. Dain Rauscher Wessels reiterated a “strong buy” for NETE on April 2.
CacheFlow , up 62.6% — It has been a brutal year (down 70.8%) for the caching appliance vendor, which was punished in early February for missing Q3 earnings estimates and has yet to recover. Still, since nearly falling below $3 on April 4, CFLO has managed to scratch its way up to $4.98, with volume indicating that the selloff of the stock is over for now.
Openwave Systems , up 59.6% — The maker of IP-based communications platform software hit a closing low of $14.10 on April 3. Its subsequent climb may have been helped by Credit Suisse First Boston, which reiterated a “strong buy” rating last Friday.
Amazon.com , up 58.6% — There’s no guessing about the reason behind the leading online retailer’s recent surge: A projected Q1 loss (22 cents per share) that easily beats Wall Street estimates of 30 cents per share and offers evidence that the company is making tangible progress toward profitability.
Internet Security Systems , up 57.6% — Like many other Internet stocks, ISSX hit a new closing low early this month, ending at $20.11 on April 3. The Atlanta-based company this week unveiled a new version of its RealSecure intrusion detection software.
Other major ISDEX gainers for the week:
Commerce One — 55.0%
Sapient — 53.9%
RSA Security — 53.5%
Broadcom — 48.8%
Juniper Networks — 46.5%
Check Point Software — 45.1%
There will be no Morning Report tomorrow due to the Good Friday holiday. Enjoy your weekend.
