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CNNfn market movers
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February 9, 1999: 11:21 a.m. ET
Net deals fail to stem online retreat; SBH divestitures boost drug makers
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NEW YORK (CNNfn) - Two Internet deals left Wall Street profoundly unimpressed Tuesday, although some optimistic factors, notably among pharmaceutical companies, helped provide the market with contrast.
USA Networks ' (USAI) merger with Web portal Lycos (LCOS) did nothing to support Internet shares, which tumbled amid growing concerns that the sector is overvalued.
Of the deal's major players, only USA Networks shareholders saw the upside, pushing the stock up 4-3/16 to 42-1/8. Lycos fell 23-3/4 to 103-1/2, while a major shareholder, CMGI (CMGI), shed 6-7/8 to 102-1/8.
USA Networks subsidiary TicketMaster Online-CitySearch (TMCS), which will combine operations with Lycos, plunged 9-3/4 to 48.
Likewise, the morning's second big Net deal, a comparatively minor $14.5 million marketing alliance between America Online (AOL) and content provider CNET (CNET), did nothing to lift Internet investors' spirits. AOL slid 9 to 150, while CNET shares fell 22-1/2 to 101-3/4.
The Web backlash also caught high-tech media retailer Navarre (NAVR), which fell 1-9/16 to 16-7/16 amid news that it will spin off its Net Radio online unit in the next few weeks.
Although analysts noted that Navarre's retreat was not wholly due to company-specific factors but instead reflected a broad-based pullback from the Internet sector, they also warned that the online bubble may be deflating.
"The longer it takes Navarre to come to market with a filing, the greater the risk this window of bullish Internet opportunity will close," said IPO Maven analyst David Menlow.
Drug makers get lift
U.S. shares of global pharmaceutical firm SmithKline Beecham (SBH) climbed 1-15/16 to 68-1/16 on news that it will sell two subsidiaries, renewing speculation that the company may be planning a blockbuster merger.
One-time SB merger partner Glaxo Wellcome (GLX), still considered the most likely candidate in any theoretical team-up, climbed 7/8 to 63-11/16.
Shares of the companies buying the SB units also rose. Quest Diagnostics (DGX) gained 2-5/8 to 22-1/16 and Express Scripts (ESRX) added 3-1/16 to 65.
However, the closely related health care sector suffered, led by HealthSouth 's (HRC) morning retreat of 7/8 to 14. The company overnight announced a one-time charge of $310 million to cover one-time sales and acquisitions.
Earnings on tap
Among companies seeing better profit-based news, technology firms predominated.
Component maker Vishay Intertechnology (VSH) soared 1-1/2 to 13 after Merrill Lynch rewarded its narrowing fourth-quarter losses with a "long-term buy, near-term accumulate" rating.
Also rewarded for market-surprising earnings, computer retailer PC Connection (PCCC) climbed 1-15/16 to 19-7/16.
Publisher Times Mirror (TMC) gained 13/16 to 55-7/8 after reporting estimate-beating profits of 93 cents per share, although volume was uninspired as many investors feared high paper prices and flat advertising would hamper future growth.
K-Swiss (KSWS) surged 6-3/4 to 41-3/8. The manufacturer of athletic shoes beat profit forecasts by 9 cents per share and announced a 2-for-1 stock split, garnering a "buy" nod and a price goal of $50 from Goldman Sachs. 
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