This newsletter that I got via e-mail mentions NETO.
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Equity markets continued their recent trends of investors switching money between technology and cyclical issues with the tech sector winning out today. The Dow Jones Industrial Average and the S&P 500, both of which contain cyclical issues, underperformed relative to the technology weighted Nasdaq. The DJIA closed at 11031.59, up 84.77 (0.77%), the S&P 500 rose to 1345, up 12.95 (0.97%), and the Nasdaq finished at 2503.62, up 31.34 (1.26%).
IBM (NYSE:IBM) rose 8 (3.82%) to close at 217 1/4 on positive comments from an analyst at SoundView Technology Group regarding strong PC and mainframe sales. Intel (Nasdaq:INTC) also gained ground up, 1 1/4 (2.09%) to 60 15/16 on analysts comments focusing on good prospects for chip sales and healthy margins going forward. Some other stocks of note include Amazon (Nasdaq:AMZN) , down 1 (0.72%) to 136 3/8, AOL (NYSE:AOL) down 1 9/16 (1.3%) to 118 3/16, and Cisco Systems (Nasdaq:CSCO) up 1 9/16 (1.46%) to 108 1/2. Online brokerage stocks fared well on the day, with shares of Etrade (Nasdaq:EGRP) up 5.06% (up 5 5/16) to 110 3/8 and Ameritrade (Nasdaq:AMTD) up 4.84% (up 5 1/4) to 113 3/4. Lehman Brother's Richard Repetto views the two stocks as a buy.
Other news Friday included the sell off in gold stocks after investors learned that the U.K may sell more than half of its $6.5 billion in gold reserves. Newmont Mining Corp (NYSE:NEM) was down 3 5/16 (12.70%) to 22 3/4, while Ashanti Goldfields Co. Ltd. (NYSE:ASL) was off 1 1/2 (15.48%) to 8 3/16.
The week also included news regarding AT&T's expansion into the domestic cable markets. In our commentary on Wednesday, SmartPortfolio.com suggested the possibility of Microsoft (Nasdaq:MSFT) and AT&T (NYSE:T) cutting a deal. This deal came to fruition as Microsoft purchased a $5 billion equity stake in AT&T in return for the right to include its Windows CE operating system in AT&T's set-top cable boxes. "We're gratified that Microsoft shares our strategy of using broadband cable to bring a new generation of digital communications, information and entertainment services to millions of American families," said AT&T's CEO, C. Michael Armstrong.
The market continues to focus on domestic economic indicators. Friday's reports showed wages rose less than expected, easing investor concerns about inflation and reducing the possibility that the Fed will tighten in the coming months.
In a speech on Thursday, Alan Greenspan commented on his outlook for inflation as well as economic growth. Focusing on the relationship between inflation, productivity, and wages, Greenspan commented that "even if productivity does not continue to accelerate, the pickup already observed does seem to explain much of the extraordinary containment of inflation despite the ever-tightening labor markets of recent years."
Greenspan also suggested reasons that productivity has continued to grow; he focused mainly on the effects of technological innovation: "It is the observation that there has been a perceptible quickening in the pace at which technological innovations are applied that argues for the hypothesis that the recent acceleration in labor productivity is not just a cyclical phenomenon or a statistical aberration, but reflects--at least in part--more deep-seated, still developing, shift in our economic landscape."
However, Greenspan did throw in a note of caution regarding current equity valuation levels that sent jitters throughout the markets. In typical Greenspeak, the Fed Chairman said: "The breadth of technological advance and its application has engendered a major upward revaluation of business assets, both real and intangible. That revaluation has induced a spectacular rise in equity prices that to many has reached well beyond the justifiable."
Tying together future economic growth and the recent strong gains seen in the equity markets, Greenspan said "should equity markets retrench, consumer and business investment demands would, doubtless, weaken considerably." He also weighed in on the impact of tightening labor markets on future economic growth: "There are imbalances in our expansion that, unless redressed, will bring this long run of strong growth and low inflation to a close."
On the IPO front, the internet beat goes on. Friday concluded another busy week in IPO markets with the focus once again on the internet. The recent weakness in the secondary trading of less popular internet IPOs has worked its way into the primary IPO market where issues are priced. For example, Netobjects (Nasdaq:NETO) priced Thursday at 12, in the middle of its range of 11-13, notably missing any upward price revisions, and closed up 8.33% to 13. Apparently, the weak performance of recent new issues such as Applied Theory (Nasdaq:ATHY) and Comps.com (Nasdaq:CDOT) has spooked underwriters into being less aggressive when pricing lesser known internet issues.
Looking ahead, a couple of eye catching IPO names that have been delayed in the past are finally scheduled to debut. Etoys (Nasdaq:ETYS), which had been delayed due to a merger with Babycenter, is now tentatively scheduled to trade around May 20th. Barnesandnoble.com (Nasdaq:BNBN), which has been planning its IPO since September of last year, filed an amended prospectus indicating that it will try to raise approximately $300 million. This represent a $200 million increase over its first filing back in September. BNBN is now scheduled to trade on or about May 25th.
New issues from Thursday and Friday included:
Portal Software (Nasdaq:PRSF) – Priced at 14 on Wednesday, opened at 35 on Thursday, traded as high as 44 closing at 37 3/8, up 23 3/8 (167%). Portal Software develops, markets and supports real-time, scalable customer management and billing software, or CM&B software, for providers of Internet-based services.
Radio One (Nasdaq:ROIA) – Priced at 24 on Wednesday, opened at 28 on Thursday, closing at its high of 34 5/8, up 10 5/8 (44%). Radio One is the largest radio broadcasting company in the United States primarily targeting African-Americans.
Destia Communications (Nasdaq:DEST) – Priced at 10 on Wednesday, opened at 10 3/4 on Thursday, traded as high as 11 7/16 closing at 10 1/8, up 1/8 (1%). Destia Communications is a facilities-based provider of domestic and international long distance telecommunications services in North America and Europe.
Media Metrix (Nasdaq:MMXI) - Priced at 17 on Thursday, opened at 33 on Friday, traded as high as 54 5/8 closing at 45 9/16, up 28 9/16 (168%). Media Metrix is a leading provider of Internet audience measurement products and services.
Adforce (Nasdaq:ADFC) - Priced at 15 on Thursday, opened at 23 3/8 on Friday, traded as high as 35 3/16 closing at 29 15/16, up 14 15/16 (99%). Provider of centralized, outsourced ad management and delivery services on the Internet.
Netobjects (Nasdaq:NETO) - Priced at 12 on Thursday, opened at 12 on Friday, traded as high as 16 3/8 closing at 13, up 1 (8.3%). Netobjects is a provider of e-business software and solutions that enable small to medium-sized companies and large-scale enterprises to build, deploy and maintain web sites on the Internet and corporate intranets.
IPOs expected to price next week include (* indicates internet related issues):
*5/11 - CareerBuilder (Nasdaq:CBDR) - Provider of comprehensive online recruitment offerings for employers and job seekers.
5/12 - Time Warner Telecom - A facilities-based competitive local exchange carrier in selected metropolitan markets across the United States, offering a wide range of business telephony services, primarily to medium- and large-sized business customers and other carriers.
*5/13 - Alloy Online (Nasdaq:ALOY) - An Internet destination providing community, content and
commerce to Generation Y, the 56 million boys and girls between the ages of 10 and 24.
*5/13 - Scient Corp. (Nasdaq:SCNT) - Provider of eBusiness services including strategy consulting, customer experience design, systems architecture, and application and technology infrastructure development.
*5/13 - Intelligent Life (Nasdaq:ILIF) - Provider of independent, objective research regarding consumer banking and credit products and a significant publisher of original editorial content relating to personal finance matters through its internet sites Bankrate.com, theWhiz.com, Consejero.com and CPNet.com and in print through Bank Rate Monitor and Consumer Mortgage Guide.
*5/14 - Copper Mountain Networks (Nasdaq:CMTN) - Supplier of high-speed DSL-based communications products for the broadband access market.
5/14 - KBW Inc (NYSE:KBW) - An institutionally oriented investment banking firm that is a nationally recognized authority on the commercial banking and thrift industries, which has been the Company's primary focus since its inception in 1962.
Week of May 10th –Dag Media (Nasdaq:DAGM) - Publisher and distributor of yellow page directories in print and on the world wide web, with its largest directory, THE JEWISH ISRAELI YELLOW PAGES published, bilingually, in English and Hebrew.
Week of May 10th – Linkage Solutions (Nasdaq:LNKG) - Provider of organizational development and corporate education programs, services and products designed to improve the efficiency, effectiveness and productivity of individual employees and organizations.
Week of May 10th – Maker Comm (Nasdaq:MAKR) - A fabless semiconductor company that develops and markets high-performance programmable communications processors, development tools and application software for use in communications systems equipment.
Week of May 10th – Multi-Link Telecom (Nasdaq:MLNK) - Provides integrated voice and fax messaging services for small and medium sized businesses.
*Week of May 10th – Nextcard (Nasdaq:NXCD) - Internet-based provider of consumer credit.
Week of May 10th – Proformance Research (Nasdaq:PROO) - Provides golf instruction services and sells golf related products.
Week of May 10th – Tenfold (Nasdaq:TENF) - A software and services company that builds and implements large-scale, complex applications rapidly and for a fixed price.
*Week of May 10th – TheStreet.com (Nasdaq:TSCM) - A web-based provider of financial news, commentary and information aimed at helping readers make informed investment decisions.
Week of May 10th – Wesco Intl (NYSE:WCC) - Provider of electrical products and other industrial maintenance, repair and operating supplies and related value-added services in North America. |
