TALKING POINT-Flight to quality in Internet stocks
By Jennifer Shaw
NEW YORK, Nov 18 (Reuters) - Internet stocks, the archetypal speculative class, took a defensive turn on Wednesday as investors flocked to older, profitable and safer names in the group.
''It's a flight to quality for the Internet stocks, if you can call it that,'' said Paul Bard, an Internet analyst with Renaissance Capital.
Buying in the big Internet names was seen on both the retail and the institutional level, traders said.
''Rather than just buying anything that has '.com' in the name, investors are getting more selective,'' said Peter Coolidge, senior equity trader at Brean Murray & Co.
Analysts and traders who follow the sector said the big names like America Online Inc. (NYSE:AOL - news) and Amazon.com Inc. (Nasdaq:AMZN - news) were most likely to attract institutional interest.
''Normally, the institutions will go into the bigger names,'' said Michael Cope, a managing director of Nasdaq trading at Dain Rauscher.
AOL was atop the New York Stock Exchange's most active list at mid-afternoon, up $8.19 at $83.25 in its first day of trading after a two-for-one stock split.
Yahoo! Inc. (Nasdaq:YHOO - news), considered one of the industry's benchmark issues, was up $10.25 at $187.
Amazon.com soared $17.875 to $166.375.
''Yahoo! and AOL have really established themselves as Internet players...they have a larger track record,'' said Renaissance's Bard.
Another member of the Internet old guard, Netscape Communications Corp. (Nasdaq:NSCP - news), led the Nasdaq stock market most-active list, up $5.75 to $35. The Wall Street Journal said the company was discussing partnership possibilities with AOL.
Among Internet newcomers, EarthWeb Inc. (Nasdaq:EWBX - news), which went public in a stunning debut two weeks ago, was down $7.125 at $43.875, while theglobe.com (Nasdaq:TGLO - news) fell $2.56 to $37.875.
Infonautics Inc. (Nasdaq:INFO - news), which last week traded as high as $10, was down $1.25 at $4.
''With Earthweb and theglobe.com, which were bid up to these huge levels, the high levels weren't reflective of the value of the company. It's the return of the rational investor,'' said Bard.
The Internet sector proved a bright spot in a lackluster market. Shortly after noon, the Dow Jones Industrial Average was up 4.37 points at 8989.62.
The American Stock Exchange's Internet index was up about 5.3 percent. |
