Thursday’s gains for the Nasdaq and internet.com’s Internet Stock Index were like welcome a breath of fresh spring air, but they did little to help weary tech investors dig out from a deep pile of winter losses.
The ISDEX gained 8.04, or 3.9%, to close at 212.29 on Thursday, while the Nasdaq climbed 67.48, or 3.7%, to 1897.71. The Nasdaq seemed headed for a below-1800 finish before joining a Dow rally late in the day.
Still, tech and Internet stocks remain buried, with the ISDEX down 5.2% for the past week, 18.2% in March and 41.2% for the year to date. The Nasdaq’s losses are 2.2% in the past week, 11.8% in March and 23.2% YTD.
The short-term outlook isn’t encouraging, either. While the rapid descent of blue-chips toward a bear market in the past few days may have taken some of the heat off tech and ‘Net tickers, all remain caught in the same economic downturn. When investors react negatively to a half-point interest-rate reduction because they had been hoping for a cut of three-quarters – a rare event – panic is around the corner, right behind gloom.
But this morning we’ll choose to focus myopically on Thursday’s strong performance by the ISDEX. Thirty-eight of the index’s 50 member stocks posted gains, with 10 notching double-digit advances.
Leading the ISDEX Thursday was high-speed chipmaker Broadcom , which soared 19.8% to $37.88 after announcing Wednesday that a change in accounting methods had reduced Q3 and annual losses in 2000. The change also lowered Q4 revenues by nearly 10%, but investors focused instead on the improvement in the bottom line of 3 cents per share in Q3 and 2 cents per share for the year.
Caching appliance vendor CacheFlow , one of the ISDEX’s biggest YTD losers, climbed 16.7% to $4.38 on Thursday. A Wedbush Morgan Securities analyst reiterated a “buy” rating and $22 per share target price for CFLO.
Streaming multimedia software leader RealNetworks rose 16.2% to $6.72 on a couple of positive news items. The company on Wednesday said it would unveil a new Web site for distributing, selling and marketing online video games. On Thursday, a spokesman for Major League Baseball said it was close to signing a multiyear deal allowing RNWK to broadcast games on the Internet.
Late Thursday, however, U.S. news services picked up a story from a Japanese newspaper reporting that Sumitomo Corp. would end a music and video distribution venture with RNWK due to a lack of subscribers.
Pay-for-position Web search site GoTo gained 14.4% to $6.69 after announcing it expects to exceed Q1 numbers forecast last month. The company in February predicted Q1 sales of $45 million and a net loss of $16 million.
Online auction leader eBay advanced 14.0% to $36.63, with no visible catalyst, while mobile Internet infrastructure software maker Openwave Systems
shook off a “neutral” reiteration by a Stephens Inc. analyst to gain 14.0%, finishing at $24.47.
