THE BIG BOUNCE... Net stocks may have gotten hammered Monday, but
obviously people still believe in buying on the dips. AOL, which fell
nearly 24 points Monday, rose 12 13/16, to $128 11/16. Amazon jumped
13 1/16, to $172, while Yahoo! gained 7 5/16, to close at $171. Among
the Internet brokers, AmeriTrade surged 23 1/4, to $111 1/8, while
E*Trade leapt 16, to $89 13/16. One big name that DIDN'T bounce back
was CMGI. After falling 46 7/8 on Monday, it dropped another 8, to
$206. Although I love MSFT, I'd be a lot more careful about jumping on
these Net names. Their valuations are still huge, and I think we're
going to see more profit-taking in the Net sector.
MERCK MOVES.... One of my perpetual favorites, Merck, jumped 2 1/8, to
$75 1/4, after the FDA granted approval for its new painkiller, Vioxx.
That decision isn't good news for Monsanto, which makes a similar drug
called Celebrex. Launched earlier this year, Celebrex has been selling
like hot cakes, but the Street is worried that Vioxx will grab market
share. Also, the Journal reported today that Celebrex is linked to a
number of deaths. Despite the all the bad news, Monsanto managed to
rise 7/8, to $43.
E-COMMERCE HORIZONS.... This just in! Ace reporter Angela Key attended
Merrill Lynch's presentation of their new report: "e-Commerce:
Virtually Here." Among the highlights: Although e-commerce represents
less than 1% of retail sales, ML finds it is growing at between 35%
and 75%. What about the Internet companies? Well, the Blodg-man
(analyst Henry Blodget) equates the Internet with such inventions as
the printing press, the telephone, the computer and electricity
(huh?). Blodget also mentioned he is confident that Amazon.com will
show a compelling profit once it scales back on marketing and
investment costs. We'll see, Mr. Blodget, we'll see. BTW, Henry was
the analyst who, to many Wall Street jeers at the time, called
Amazon's amazing rise last year, predicting $400 per share, which it
hit in January. (Thanks, Angela.)
Loose Change
Net stocks 'n' day trading. I can't say I'm that surprised by Monday's
plunge. I was on vacation in Miami Beach last week and literally
everyone was talking about Net stocks, from grandparents to teenagers.
Some folks were even regaling one another about the joys of day
trading. That kind of blind enthusiasm is almost always a prescription
for disaster.... Citigroup, which has been very strong lately,
announced a 3-for-2 stock split and a dividend hike. Citigroup rose 2
3/ 16, to $72 15/16. One bank that didn't do as well was Chase
Manhattan. Despite higher-than-expected profits, a downgrade by top
Merrill Lynch analyst Judah Kraushaar caused Chase shares to fall 2.
to $83.... On the home front, Time Warner (Fortune's owner) bounced
back a bit from recent losses, jumping 3, to $65.... Have you guys
checked out South Beach in Miami? It's pretty cool, especially the
Delano Hotel. A little too expensive to stay at but a great place to
have a drink.
Talk Back to Street Life....
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