| | Internet Stocks Help Nasdaq Make Headway
New York, Jul 14, 2000 (123Jump via COMTEX) -- As the first week of earnings season draws to a close, investors continue to push the tech sector higher. The tech-laden Nasdaq Composite gained 71.13, or 1.7%, to 4245.99, fueled by investors ploughing back into Internet stocks.
For the last three sessions, the Nasdaq has steadily climbed a healthy 7%, bringing the index to levels not seen since April. Some market watchers think that the migration back into technology growth stocks is a sign that the summer rally on Wall Street is beginning to take shape.
The Dow Industrials managed a 23.34 point gain to end the week at 10812.05 as the blue chip index was weighed down by weakness in defensive issues, such as pharmaceuticals. The broad S&P 500 gained almost 1%, or 14.11 to 1509.95, indicative of the broad rally on Wall Street.
A positive for the markets today was friendly economic data released this morning, showing inflationary pressures at the wholesale level under control while the consumer is still spending at a healthy pace.
Ariba (NASDAQ: ARBA ) was a big market mover yesterday after its stellar earnings report. The business-to-business Web software company ignited renewed interest in the B2B's. Profit taking caused Ariba's stock to shed 6 5/8, or 5%, to 124 9/16 following its strong run of late.
Other B2B stocks, however, moved higher. The other big name in this segment, Commerce One (NASDAQ: CMRC ) rocketed 10 points, or 17% higher, to 69 15/16. Analysts scrambled to change estimates and ratings as Commerce One's results, like Ariba's, are expected to be very strong when it reports on Tuesday.
Online retailing, or business-to-consumer (B2C), was also a hot segment on Wall Street Friday. Web auction house eBay (NASDAQ: EBAY ) jumped today as Credit Suisse First Boston initiated coverage of the stock with a "strong buy" rating and a price target of 72. The stock rose 7 3/4 points, or 14%, to 61 3/16.
Another big mover was the world's biggest e-tailer, Amazon.com (NASDAQ: AMZN ). Shares of the online superstore jumped 7 1/2, or over 21%, to 42 1/2. Interest in this sector stems from growing optimism that e-commerce will continue to strengthen - as suggested by the solid results posted by many tech-stocks this week.
A case in point is Gateway (NYSE: GTW ). The computer maker made 37 cents a share, beating Wall Street expectations by a penny. That was up from 28 cents in the second quarter last year, as the number two direct seller of computer hardware diversified into higher-margin businesses such as Internet services. The stock closed down 4 1/8 to 66 3/8 following a strong 24% run-up in the previous five trading sessions.
Chip makers, Vitesse Semiconductor (NASDAQ: VTSS ) hit its earnings' estimate while Canada-based PMC-Sierra (NASDAQ: PMCS ) reported a jump in profit to 23 cents a share, beating analysts' expectations by 4 cents. PMC-Sierra, whose chips speed Internet traffic, gave back 10 3/8 to 218 9/16, also after big gains leading up to the profit report.
Internet stocks that reported earnings today include Stamps.com, Webvan, C-bridge Internet Solutions, RSA Security, and Juniper Networks.
Stamps.com (NASDAQ: STMP ) beat analysts' estimates in its second quarter, dropping $34.4 million, or 72 cents per share, on sales of $3.7 million. The Street expected it to lose 82 cents per share in the quarter. Including charges, Stamps.com lost $52.3 million, or $1.09 per share, in the quarter. In the year-ago quarter, it lost $4.7 million, or 54 cents per share. The stock is added 35/64 to 6 27/64.
C-bridge Internet Solutions (NASDAQ: CBIS ) matched Wall Street estimates in its second quarter, losing $115,000, or 1 cent per share, on sales of $18.8 million. The Internet professional services firm helps companies do business on the Internet. The stock gained 3 1/2, or 15%, to 26 5/8 as Robertson Stephans upgraded it to a "strong buy" rating from "buy".
Internet security software maker RSA Security (NASDAQ: RSAS ), delivered an operating profit of 22 cents a share for the quarter, an increase from 15 cents last year. According to consensus estimates, RSA's profit was forecast to be 21 cents as revenues rose to $66.7 million from $51.8 million. Investors chopped 7 3/4 off the stock to 71, a loss of 10%.
Juniper Networks (NASDAQ: JNPR ) easily topped analysts' estimates for the quarter, raking in $28.6 million, or 8 cents per share, on sales of $113 million. The consensus estimate looked for a profit of 4 cents per share in the quarter. Juniper shares traded up another 5 1/4 to 174 3/4 - a new 52-week high.
In the year-ago quarter, the company posted a loss of $2.9 million, or 3 cents per share, on sales of $17.6 million. Last quarter, Juniper also hurdled Street estimates, earning $10.5 million, or 6 cents per share, on sales of $63.9 million.
Among the top losers Friday was online grocer Webvan (NASDAQ: WBVN ). For the quarter, it posted a wider-than-expected loss of $57.1 million, or 17 cents a share, on sales of $28.3 million - the Street predicted a loss of 16 cents. In the year-ago quarter, the company reported a loss of $23.4 million, or 38 cents a share, on sales of $383,000.
Shares of Webvan slid 1 25/32, or 16%, to 7 25/32. Fellow grocer HomeGrocer.com (NASDAQ: HOMG ) was also down 1 3/8 to close at 6 5/8. It was recently announced that Webvan has agreed to purchase HomeGrocer in a stock swap.
Analysts were also moving the market Friday as MarketWatch.com (NASDAQ: MKTW ) moved higher 1 3/8, or 9%, to end at 23 5/8. First Albany's Joel Krasner upgraded the online financial content provider to a "strong buy" rating from a "buy".
Savvis Communications (NASDAQ: SVVS ) was also raised to a "strong buy" from a "market outperform" by Dan Renouard at Robert W. Baird. The data networking and Internet services firm gained 2 5/8, or 23%, to 13 7/8.
Looking back this past week, investors can point to Internet giant Yahoo! (NASDAQ: YHOO ) for setting the tone for the earnings' season after the Tuesday bell. Better-than-expected earnings on strong revenues persuaded market participants to snap-up stocks in the sector.
However, investors are not painting with a broad brush - as companies that disappoint the Street will not go unnoticed.
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