NEW YORK (CNNfn) - Technology shares stumbled late Tuesday from an early rally as investors engaged in profit taking from stocks that had been posting huge gains in recent weeks.
America Online Inc. continued its hot streak, however, after announcing it will acquire Netscape Communications Corp. in a $4.2-billion stock swap, a deal that also involves Sun Microsystems Inc. According to preliminary data, AOL (AOL) shares closed at 90-11/16, up 1-7/16. Netscape (NSCP), however, fell 2-1/16 to 39-7/8, while Sun (SUNW) rose 1-9/16 to 72-7/8.
The deal was bad news for Web portal companies, however, because AOL will lend its brand name and 14 million customers to Netscape's Netcenter site.
Lycos Inc. (LCOS) tumbled 2-3/4 to 62-5/16; Excite Inc. (XCIT) fell 1-7/8 to 49-1/16; and Infoseek Corp. (SEEK) slipped 1-5/16 to 33.
Portal leader Yahoo Inc. (YHOO) dropped 11-3/16 to close at 210-1/4. Along with the strong competition posed by the AOL-Netscape deal, investors enjoyed some profit taking from a stock that had climbed more than $40 in the past week.
Elsewhere in the sector, Amazon.com Inc. (AMZN) lost 3-1/2 to close at 214-1/2, EarthLink Network Inc. (ELNK) fell 3-1/2 to 53-1/4, and MindSpring Enterprises Inc. (MSPG) slipped 1-15/16 to 57-1/2.
Amid the losses, however, a pair of online auctioneers posted strong gains. OnSale Inc. (ONSL) jumped 14-7/8, or 51 percent, to 43-7/8 after the company announced the launch of a holiday shopping store on its Web site.
eBay Inc. (EBAY), which has soared more than 80 points in the last week, rose another 17 to 210, though it had shot up as much as 41-1/8 earlier in the day.
Among software companies, Intuit Inc. (INTU) dropped 4-1/4 to 59-7/8 as investors anticipated first-quarter 1999 results from the maker of personal-finance software. After the market close, the company reported a proforma loss of 45 cents a share, a penny ahead of analyst estimates, according to First Call.
Oracle Corp. (ORCL) fell 1-15/16 to 34-15/16, Adobe Systems Inc. (ADBE) dropped 1-3/4 to 46-1/4, and Citrix Systems Inc. (CTXS) lost 1-3/4 to 84-3/4.
Microsoft Corp. (MSFT), meanwhile, gained 2-1/2 to 121-11/16 as some investors believe the AOL-Netscape deal could weaken the government's antitrust suit.
Among industry bellwethers, Intel Corp. (INTC) fell 3-1/8 to 110-7/16; Dell Computer Corp. (DELL) slipped 1 to 64-7/8; and IBM Corp. (IBM) shed 1-5/16 to 165-1/4.