Upgrades Send Internet Stocks Soaring

Internet stocks were trading sharply higher at midday Wednesday as the group was benefitting from a series of positive analyst comments.

Just before noon, internet.com’s Internet Stock Index was up 13.88, or 2.89 percent, to 494.83 and the Nasdaq Composite had added 6.93 to 2,678.15 while the blue chip Dow Jones industrial average had slumped 50.34 to 11,066.74.

Amazon.com Inc. (AMZN) had jumped 6-7/8 to 116-1/8 and Yahoo! Inc. (YHOO) was up 8-1/16 to 145-15/16.

Both were helped by Merrill Lynch & Co.’s Henry Blodget who raised his rating on Yahoo! and Amazon.com to “short-term buy.” He also recommended investors buy a number of sector leaders, including America Online Inc. (AOL) up 3-13/16 to 101-5/16, eToys Inc. (ETYS) up 5-13/16 to 46-1/16, [email protected] Corp. (ATHM) up 2 to 41-5/8, Lycos Inc. (LCOS) adding 3-13/16 to 46-1/8, Inktomi Corp. (INKT) moving up 3-1/2 to 119-1/2 and Barnesandnoble.com (BNBN) which had jumped 2-3/8 to 19-1/8.

Blodgett expects online shopping during the holiday season to be two to three times bigger than last year.

eBay Inc. (EBAY) had climbed 8-13/16 to 126-9/16. Josephthal & Co. Wednesday upgraded the online auctioneer to “strong buy” from “buy.”

iVillage Inc. (IVIL) tumbled 4-5/8 to 48-3/8. The company this week filed to sell an additional 2.7 million common shares.

Online brokers were slumping Wednesday following a report from BancBoston Robertson Stephens forecasting lower revenues for E*Trade Group Inc. and Ameritrade Holding Corp.. E*Trade, which also announced a lower commission schedule for active online traders, (EGRP) was off 1 to 29-1/4, Ameritrade (AMTD) had fallen 11/16 to 24-13/16, National Discount Broker Group Inc. (NDB) had fallen 1-3/8 to 34-5/8, Charles Schwab Corp. (SCH) had tumbled 2-3/16 to 43-5/16 and Siebert Financial Corp. had slumped 1/2 to 19-1/2.

Finally, Web publishing software maker Vignette (VIGN) were up 4-1/2 to 58-11/16. Banc of America Securities reiterated its “buy” rating and analyst Greg Vogel set a $95 price target.

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