16:00 3 1/8 -1/16 (1.96)
Volume 1,365,600
sector is hot !!!!
Internet brokerage stocks continue to rally
NEW YORK, Jan 12 (Reuters) - The stocks of Internet brokerages on Tuesday continued to rally on increased trading volumes despite the overall stock market slump.
Cyberspace brokers E*Trade Group Inc. (Nasdaq:EGRP - news) and AmeriTrade Holding Corp. (Nasdaq:AMTD - news) soared more than 25 percent to hit new highs of 108 and 72, respectively. E*Trade's stock later Tuesday afternoon traded at 101, up 12-1/2, while AmeriTrade shares gained 15-1/2 to 58-1/2.
The gains came as the Nasdaq stock market declined more than two percent Tuesday afternoon, and Internet providers such as Lycos Inc. (Nasdaq:LCOS - news) posted double-digit percentage losses.
E*Trade's stock has soared tenfold and AmeriTrade shares have quadrupled in the last three months, following similar out-sized gains by the stocks of Internet providers and commerce companies such as Yahoo! Inc (Nasdaq:YHOO - news) and Amazon.com Inc. (Nasdaq:AMZN - news) The brokers are benefiting from a surge in online trading and have taken on the valuations of Internet companies, analysts said.
The stock of the largest Internet market making firm, Knight/Trimark Group Inc.(Nasdaq:NITE - news), has fared even better, soaring twelvefold in three months. The firm, which said it executes nearly half of all Internet trades, late Friday reported reported trading volumes were up 58 percent in the fourth quarter. The stock on Tuesday hit a record 64-1/2 but later traded at 54-1/2, up 16.
E*Trade on Monday reported record revenues in the fourth quarter on Monday. On Tuesday, the Palo Alto, Calif., brokerage said it would take a minority stake in a start-up virtual investment bank in a sign that on-line brokerages are making inroads in one of the most lucrative securities businesses -- stock offerings.
''E*Trade is hypersensitive to the movements in Internet stocks in a couple of ways, because it's valued as both a peer group and on the fundamentals,'' said analyst Steve Franco of Piper Jaffray. ''As long as the bubble exists, E*Trade customers are driving a lot of the trading volumes in these stocks.''
AmeriTrade, which is based in Omaha, Neb., recently raised its profit estimates for its first quarter ended December 31 because of higher trading volumes.
Related Quotes
AMTD 58 1/2 +15 1/2
AMZN 161 -23 5/8
EGRP 100 1/2 +12
LCOS 103 3/4 -27 1/4
NITE 53 1/8 +14 5/8
YHOO 396 1/2 -18
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