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CNNfn tech stock report
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January 11, 1999: 5:34 p.m. ET
Internet shares blow through the roof as investors flock to portals
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NEW YORK (CNNfn) - Another day, another remarkable Internet rally, as investors expressed overwhelming enthusiasm for Web portal sites Monday, while corporate announcements sent other Web-based stocks soaring to new heights.
Internet bellwether Yahoo! Inc. (YHOO) jumped 73-3/8 to 417 on news of a marketing alliance with IBM Corp. (IBM). Yahoo! is also set to report fourth-quarter earnings Tuesday. Analysts expect the company to report a profit of 16 cents a share.
Yahoo's rise helped fuel other Web portal shares. Infoseek Corp. (SEEK) soared 32-5/8 to 87-3/4; Lycos Inc. (LCOS) spiked 39-1/4 to 131; and Excite Inc. (XCIT) added 21 to 81.
Elsewhere online, Web-based broadcaster Broadcast.com (BCST) exploded 87-9/16 to 285-1/16 after setting a 2-for-1 split. The company has been publicly traded for only six months, having debuted in July.
RealNetworks Inc. (RNWK), which powers media transmission for Broadcast.com and other streaming Web sites, rose 11-3/4 to 61-3/4. Friedman Billings Ramsey & Co. analyst Rob Martin set a 12-month price target of $75 on the company, raising his recommendation to "buy" from "accumulate."
Competing Internet radio company Navarre (NAVR), which operates NetRadio as a sideline to its more mainstream music-distribution business, benefited from Broadcast.com's ascent, climbing 5-1/16 to 18-3/4 in heavy volume.
Ticketmaster Online-CitySearch Inc. (TMCS) soared 10-5/8 to 67-1/2 after the company agreed to acquire privately held online auction site CityAuction Inc.
Online brokerage E*Trade Group (EGRP) leapt 20-7/8 to 88-1/2 after reporting a smaller operating loss than analysts had forecast.
Shares of Internet retailer Shopping.com (IBUY) also made headway, rising 5-13/32 to 18-19/32 after Compaq Computer Corp. (CPQ) said it is shopping for the company at a price of $19 per share.
Upscale retailer Sharper Image contributed indirectly to the Internet fervor after the company said it will add an online auction to its Internet site, similar to those run by Wall Street darlings eBay Inc. (EBAY) and uBid Inc. (UBID)
Sharper Image (SHRP) shares climbed 8-1/4 to 20-5/8 in heavy volume.
Other big Internet gainers included Inktomi Corp. (INKT), which jumped 21-1/4 to 178-3/4; GeoCities (GCTY), which soared 21-1/4 to 76-1/8; and DoubleClick Inc. (DCLK), which finished 20-11/16 higher at 78-9/16 after the online ad firm reported its Dart technology served more than 5 billion ads in December.
Hugh Johnson, First Albany chief investment officer, told CNNfn technology stocks - particularly Internet shares - could soon face a downward turn because there is too much optimism in the market.
"What would spark it is if some reality would set into the Internet," he said. "If there were some sort of earnings disappointment, that could do it. The market is so overvalued it can't sustain a disappointment by an Intel. That would not just affect Intel, it would affect the whole sector."
Internet shares have soared to stratospheric heights since the new year began. While Johnson and other analysts expect the Internet bubble will soon burst, nearly one out of every four investors believe the bubble will never burst, according to a poll by CNNfn.
You can weigh in with your own opinions on the CNNfn Internet Poll.
In the networking sector, Ascend Communications Inc. (ASND) rose 5-1/4 to 76-11/16 amid reports that it is the target of a $16-billion takeover by telecommunications-equipment maker Lucent Technologies Inc. (LU). Lucent shares slipped 2-3/8 to 112-7/8.
Finally, chip giant Intel Corp. (INTC) soared 9-3/4 to 139-7/16 after the company dubbed its next-generation microprocessor Pentium III. Following the announcement, Lehman Brothers raised its price target for Intel to $180 from $135. The company is also set to report fourth-quarter earnings results Tuesday. Analysts expect Intel to report earnings of $1.07 a share. 
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