Given its status as the world’s most important networking company, one would expect bad news from Cisco to drag down other Internet-related stocks.
But internet.com’s Internet Stock Index, or ISDEX, not only withstood downward pressure on Wednesday from Cisco Systems
CEO John Chambers’ comments that the current quarter has been “more challenging” than company executives expected, the 50-member index actually doubled the Nasdaq’s impressive gains for the day.
The ISDEX finished at 358.93, or 6.83% above Tuesday’s close, while the Nasdaq advanced 3.39% to end at 2524.18. In the early days of 2001, the ISDEX is now virtually at break-even (-0.6%), while the Nasdaq has advanced 2.2%.
Even Cisco rallied from Chambers’ cautionary statements at a Morgan Stanley technology conference. After falling nearly 10% earlier in the day, CSCO scrapped back to finish at $36.25, or down 2.4%.
Cisco was one of only five ISDEX stocks to lose ground Wednesday. The gainers were led by Ticketmaster Online-CitySearch
Online auction giant eBay
zoomed up 17.8% Wednesday amid favorable reaction to Monday’s announcement that it will buy South Korea’s Internet Auction Co. for $120 million, a move that will give EBAY a footprint in the world’s sixth-largest ‘Net market.
Altogether, 18 of the 50 ISDEX stocks posted double-digit gains Wednesday, including streaming multimedia software and entertainment content provider RealNetworks
, 15.9%; real estate Web site network Homestore.com
, 15.3%; and e-commerce software providers i2 Technologies
, 15.1% and BroadVision
How Low Can Yahoo Go?
Meanwhile, after announcing Q4 results that met street forecasts of a 13 cents per share net profit, Yahoo
plummeted in after-hours trading (as did many ‘Net stocks, including eBay) as investors reacted to the portal giant’s warning that profits would fall from 10% to 30% this year.
Yahoo closed Wednesday at $30.50, dropping as low as $24.63 after hours. Though Yahoo, with $1.7 billion in cash and marketable securities, is far from being in danger, things clearly will get worse before they get better. I think shares could drop as low as $15 in coming months and, depending on broader market trends, single digits aren’t out of the question.