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CNNfn market movers
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February 9, 1999: 2:07 p.m. ET
Internets run aground amid Lycos deal but Vishay, K-Swiss see bright side
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NEW YORK (CNNfn) - Wall Street rejected two high-profile Internet tie-ups Tuesday, leaving the online sector to fall unsupported while investors flocked instead to the bottom line of hard earnings.
USA Networks ' (USAI) merger with Web portal Lycos (LCOS) did next to nothing to inspire shareholders to buy in the broad market.
Of the deal's major players, only USA Networks shareholders saw the upside, pushing the stock up 4-7/16 to 42-3/8. Lycos fell 25 to 102-1/4, while a major shareholder, CMGI (CMGI), shed 12-7/8 to 96-1/8.
USA Networks subsidiary TicketMaster Online-CitySearch (TMCS), which will combine operations with Lycos, plunged 10-5/8 to 47-1/8 in the backwash.
Ripples from the deal even spread to Shop-at-Home (SATH), where investors fearing the Lycos deal could bring increasing pressure on the USA rival's efforts to expand its business drove shares down 5-3/16 to 24-7/8.
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 8-11/16 to 150-5/16, while CNET shares fell 22-3/4 to 101-1/2.
Of IPOs and Internet envy
The Web rout also caught high-tech media retailer Navarre (NAVR), which fell 1-7/8 to 16-1/8 amid news that it will spin off its Net Radio online unit in the next few weeks.
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. However, some noted that the online boom could be fading.
"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.
For all that, the bullish Internet window stayed open Tuesday for at least three smaller companies tightening their association with the volatile online sector.
Intermedia Communications (ICIX) was luckier than Navarre, inching up 1/2 to 18-1/16 on news that it will take its Web hosting subsidiary, Digex, public.
Sports-apparel maker Innovo (INNO) climbed 2 to 3-3/4 after announcing it will open a Web-based retail outlet.
Delicatessen chain Big City Bagels (BIGC) surged 29/32 to 1-31/32 on the strength of a merger with privately held Internet firm Villagenet and software maker Intelligent Computer Systems.
Drug makers get lift
U.S. shares of global pharmaceutical firm SmithKline Beecham (SBH) climbed 1-13/16 to 68 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 11/16 to 63-1/2.
Shares of the companies buying the SB units also rose. Quest Diagnostics (DGX) gained 2-7/16 to 21-7/8 and Express Scripts (ESRX) added 4-1/16 to 66.
However, the closely related healthcare sector suffered, led by HealthSouth 's (HRC) retreat of 1-1/8 to 13-3/4. The company overnight announced a one-time charge of $310 million to cover one-time sales and acquisitions.
Earnings on tap
In other profit-based news, high-tech firms dominated the day's ebbing flow of quarterly earnings as the reporting season recedes again for another three months.
Component maker Vishay Intertechnology (VSH) climbed 1-7/8 to 12-15/16 after Merrill Lynch rewarded its narrowing fourth-quarter losses with a "long-term buy, near-term accumulate" rating.
Also rewarded for market-surprising results, computer retailer PC Connection (PCCC) firmed 2-1/8 to 19-5/8.
Publisher Times Mirror (TMC) gained 9/16 to 55-5/8 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 6-13/32 to 41-1/32. 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.
On the other hand, investors chastised Vermont Teddy Bear (BEAR), which fell 15/16 to 2-7/8 despite fourth-quarter earnings of 2 cents per share versus a 20 cent per-share loss a year ago. Wall Street seemed unimpressed by the company's new designs, aimed at "mirroring edgier consumer lifestyles."
Likewise, Concurrent Computer (CCUR) fell 1-1/32 to 3-15/16 after reporting near break-even profits. Traders said the market had hoped for a sharper increase and had been spooked by allusions to the company's exposure to a weak Japanese market. 
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