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Nets spring back to life
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May 26, 1999: 6:30 p.m. ET
Bargain-hunting sets in after two-day lull, despite talk of dip from top analyst
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NEW YORK (CNNfn) - Once again for that irrepressible Internet sector, it was "what goes down must go up" Wednesday, despite a warning about the stocks from a top analyst.
Internet issues seized back the spotlight of investors, springing upward after two days of sharp losses.
That came even though Mary Meeker, Morgan Stanley Dean Witter's Internet stock analyst, said the firm's Internet index is likely to face a 20-percent pullback in coming months. The Morgan Stanley Internet index is already down 33 percent from its April high.
Among the Internet sector leaders, America Online (AOL) rose 5-5/16 to 120-5/16, Amazon.com (AMZN) gained 9-3/8 to and Yahoo! (YHOO) climbed 13-15/16 to 140-7/8.
Online learning software company 7th Street.com (SEVL) gained 7/8 to 6-11/32, after announcing a deal to supply IBM (IBM) with Internet streaming technology.
IBM shot up 15-1/16 to 236-1/4.
Also springing back up from recent softness were the Web healthcare information service provider Healtheon (HLTH), rising 20 to 87, video streamer RealNetworks (RNWK), up 12-3/16 to 70-3/16, and Inktomi (INKT) gaining 12 to 98.
The initial public offering market for Internet-related stocks was hot, but not blazing.
The day's stand-out was StarMedia Network Inc. (STRM), which surged nearly 74 percent to 26-1/16 on its first day of trading. Analysts expected a strong performance from the company because it targeted an undertapped market -- online Latin America -- and was one of the first companies in its space, which has proven to be an important ingredient for strong gains.
DLJDirect (DIR), also turned in a strong performance, rising up to 30, after the online broker priced at $20 per share.
Not faring as well were Internet service provider Juno Online Services (JWEB), falling to 11-5/8, from its $13 offering price, and Securities and Exchange Commission data provider Edgar Online (EDGR) nosing up to 9-9/16, after pricing at 9-1/2.
And in software...
One hybrid company with one foot in the software market and the other in the Internet space is Intuit (INTU), which dropped 5/8 to 76-15/16.
That came even though the personal finance software maker late Tuesday reported a profit of 73 cents a share in its third quarter, topping analysts' expectations by 3 cents a share.
Morgan Stanley raised its 1999 earnings estimate on Intuit to $1.30 a share from $1.27.
Looking brighter to investors was New Era of Networks (NEON), climbing 5 to 44-1/2 after Prudential Securities opened its coverage with a "strong buy" on the maker of software that helps upgrade old computers.
And Sun Microsystems (SUNW) rallied 5-3/4 to 60-13/16, in part after reports emerged that a federal judge delivered a partial victory to the software maker in its continuing squabble with Microsoft (MSFT) over Sun's Java software.
The judge said Microsoft's use of java code infringed on Sun's copyright, but also said that Microsoft, whose shares added 2-1/4 to 78-1/2, can develop similar technology.
In the cable market, two private firms agreed to a $3.6 billion merger. Microsoft co-founder Paul Allen's Charter Communications Inc. will buy Falcon Cable. Both are privately held.
But among publicly-traded cable firms, Adelphia Communications (ADLAC) rose 3-7/8 to 77-7/8 after swapping some systems with Comcast (CMCSK).
Comcast added 1-5/8 to 38.
Adelphia will receive about a half-million subscribers near Los Angeles and Palm Beach, Calif. Comcast will get about the same number of customers in the mid-Atlantic region.
In the related telecom sector, ADC Telecommunications (ADCT) fell 1-25/32 to 47-7/16 after the telecom-equipment maker agreed to buy networking components maker Spectracom for $105 million.
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