If it’s not earnings warnings, it’s the Florida presidential vote drama. If it’s not Florida, it’s the Fed’s policy on interest rates.
Whatever the reason du jour, tech and Internet stocks continue to sputter and spin their wheels after showing signs of a comeback two weeks ago.
The Nasdaq slipped 2% in the week of trading ended Wednesday (even falling below 3,000 for the first time in more than a year), while internet.com’s Internet Stock Index, or ISDEX, dropped 6.8%.
For the year, the ISDEX is down 34% from its Dec. 31 close of 860.35.
Only seven of the 50 ISDEX members gained this week, led by Sycamore Networks
, which shattered street revenue estimates and topped earnings forecasts by a penny. (See Sycamore Stands Tall.
Other ISDEX stocks bucking the downdraft this week are:
High-speed chipmaker Broadcom
, which posted an 11.8% gain (but lost most of it on Thursday after Merrill Lynch cut ratings for BRCM and some of its competitors, citing possible market oversupply;
, up 8.2%, thanks in part to its announcement of upgraded development software for XML technology;
, up 6.5%; SportsLine.com
, up 6.1%; Internet Security Systems
, up 4%; and Cisco Systems
, up 2.8%.
Given the industry’s increasing pessimism about online advertising growth, it’s no surprise that the biggest losers in the ISDEX this week are companies such as 24/7 Media and CMGI.
Shares of Internet advertising company 24/7 Media
plummeted 44.1% after the company announced plans to cut 200 jobs, or about 17% of its workforce, by the end of this year. Further, a Merrill Lynch research report predicted that, unless TFSM sells equity in other ‘Net companies or raises additional funding, it will run out of cash in Q1.
, meanwhile, continues to be dragged down by bad news from some of its majority-owned companies. The latest came on Monday from online marketing firm Engage
, which warned that revenue growth will slow dramatically in 2001.