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Report sinks Net brokers
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August 3, 1999: 2:45 p.m. ET
Credit Suisse analyst says sector may see decline in online trading volumes
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NEW YORK (CNNfn) - Shares of the top Internet brokerages fell Tuesday afternoon after a bearish report on the sector from a key industry analyst.
Bill Burnham, an analyst at Credit Suisse First Boston, said in a report that online trading volumes in July, while slightly higher than June figures, were "clearly lower" than volumes in April -- the previous earnings-reporting month.
Burnham attributed much of the decline to ongoing weakness in Internet stocks.
He added that online trading firms, which have enjoyed tremendous growth over the past few months, may suffer through their first sequential decline in trading volumes during the third quarter.
Burnham said he doesn't expect a recovery in the sector until late September or mid-October.
On the heels of that report, Charles Schwab Corp. (SCH), the No. 1 discount and Internet broker, fell 3-15/16 to 38-1/2 shortly before 2:30 p.m. ET.
Other online trading firms taking a plunge included DLJDirect (DIR), which lost 2-1/8 to 19; E*Trade Group (EGRP), which dropped 3-3/8 to 25-5/8; and TD Waterhouse Group (TWE), which dipped 1 to 16-1/8.
Burnham named Ameritrade (AMTD) as the highest-valued name among Internet brokers. Nonetheless, its shares lost 2-1/2 to 21-1/2.
The vicious cycle of Internet shares dragging down online brokers was in evidence Tuesday as nearly all the sector's key players saw their stock take a tumble.
Yahoo! Inc. (YHOO), for instance, fell 6-1/8 to 126-3/16; eBay Inc. (EBAY) tumbled 5-3/16 to 86-1/16; and RealNetworks Inc. (RNWK) tumbled 3-31/32 to 69-3/8.
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