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Technology Stocks : Internet Guru Discussion -- Ignore unavailable to you. Want to Upgrade?

To: Riley who wrote (2663)	9/6/1999 11:19:00 PM
From: puborectalis	Respond to of 4337

Labor Day Of Investor Love? Dawn Patrol September 07, 1999 by Loren Fox Monday is a holiday, so investors will have to wait an extra day to see if the market continues Friday's rally. Even with the three-day break, momentum heading into Tuesday morning favors the bulls. For one thing, the rally in technology stocks actually strengthened in the final hour of trading, which is a positive for the following session. Also, lots of investors will be back from vacation Tuesday, meaning more people may be looking to buy stocks. Friday's action was impressive enough that it may have repercussions for Tuesday. The technology-rich Nasdaq index rose a record 108.87 points, or 4 percent. That left the Nasdaq index at 2843.11, just 0.7 percent below its all-time, July 16 high of 2864.48. Another bullish sign is the bond market. The yield on the benchmark 30-year Treasury bond, which is a proxy for interest rates, is holding at 6.02 percent. On the economic front, Tuesday will see the release of the monthly Redbook Retail Average, which clues investors in on the strength of retail sales. Wall Street will also be gearing up for Fed Chairman Alan Greenspan's Wednesday speech in Michigan and for Friday's release of the monthly producer price index, which tracks wholesale inflation. Good Month? September has typically been a good month for tech stocks, according to Bear Stearns & Co. analyst Andrew Neff. This year, some analysts expect September to be the rebound month for Internet stocks. BancBoston Robertson Stephens analyst Keith Benjamin writes in a report that he expects the Net sector to rise this month. "We expect investors to focus on improving fundamental trends, particularly related to back-to-school and holiday shopping," he says. Company Happenings: There's not much happening in the corporate tech world Tuesday, besides barbecue hangovers. Keep an eye on computer seller Gateway (GTW) because its stock splits two-for-one at the close of Tuesday's trading. IPO Patrol: The drought in initial public offerings continues this week, as no deals are expected to come to market. A seasonal slowdown is typical at the end of August, and companies are often wary to debut during a four-day week. In addition, many companies reconsidered their IPO plans during early August's choppy IPO market. This means fewer deals to come in the next couple months, as the lower-quality companies wait for a stronger market. "There's a more discriminating market right now," says Randall Roth, an analyst at Renaissance Capital Corp., which specializes in IPO investing. Unlike the heyday of May and June, not just any dot.com company will get buyers these days, Roth tells UpsideToday. One result of this situation has been a demand for Internet infrastructure stocks, especially those of equipment suppliers. These companies are more likely to profit from the Internet, no matter which online retailer manages to succeed selling groceries, insurance or toys. Roth expects Internet infrastrucure IPOs to remain hot because investors like to avoid the most risky deals in the face of continuing interest-rate worries. As some of the borderline Internet companies postpone their debuts, a stronger IPO market with less volatility should emerge, according to Mark Basham, new-issues analyst at S&P Equity Group. Basham tells UpsideToday that IPOs are seeing a diminished impact from day traders, which also cuts volatility. While decreased volatility lessens the chance of new issues rising 200 percent on their first day of trading, it also reduces the odds of new issues plunging 50 percent on their second day. IPO activity should pick up starting the week of Sept. 13. The IPO market will likely be very busy from mid-September through mid-November, Basham says. Not surprisingly, this would coincide with what's expected to be a strong market for Internet stocks. Loren Fox is finance editor at Upside Media.