Wall Street's tough-love approach to Internet stocks didn't last long.
After a couple of days of trashing anything even remotely smelling like a Net play, investors reversed course Thursday and were rushing to embrace all things .com. Sure, they might bitch about sky-high valuations, but if there's one thing traders fear even more than being burned by bloated Internet shares, it's missing out on the action when (or if) these shares finally pay off.
The broader market was posting impressive gains in mid-afternoon trading. The Dow Jones Industrial Average rose 100.16 points to 9277.47, and the Nasdaq Composite Index was up 64.31, or 2.78 percent, at 2373.81. The S&P 500 advanced 20.58 to 1244.13.
Tech and Net stocks were the hot picks as Wednesday's bargain hunting gave way to a full-on-the-lips buying spree.
"These stocks have gotten the crap beaten out of them," said Jeff Goverman, research director at Pacific Crest Securities. "They get to a certain level, and investors see an entry point.
"People can argue about valuations," he added, "but they won't argue about the future, and that's the Internet."
Enthusiasm for cyber-everything was rekindled as a trio of Net IPOs came rocketing out of the gate. Online service Prodigy Communications (PRGY) surged 96 percent to US$29.38 after debuting with 8 million shares initially priced at $15 apiece. And Web-site operator VerticalNet (VERT) tripled in value to $51.63 after offering 3.5 million shares starting at $16 each.
Keeping up with the brisk clip, online health-services provider Healtheon (HLTH) vaulted 275 percent to $30 after arriving with 5 million shares initially priced at $8 a throw. Healtheon's cachet is enhanced by founder Jim Clark, who co-founded Netscape Communications.
Adding to the fun was Web-publisher CNET (CNET) climbing 21 percent to $110.06 after reporting that its fourth-quarter profit hit 18 cents a share, crushing the 10 cents expected by analysts. Sales for the company were up no less than 86 percent. CNET iced the cake by announcing a two-for-one stock split.
SportsLine USA (SPLN) rose 14 percent to $39.88 as it extended its relationship with CBS for another five years, and announced that CBS had boosted its stake in the online sports service to 18 percent from 12.5 percent. Meanwhile, financial-news provider MarketWatch.com (MKTW) was $6 higher at $71.50 after saying its revenue and traffic were both up, even if the company lost 47 cents a share in the latest quarter.
Theglobe.com (TGLO) gained 11 percent to $49.75 after cutting a deal to offer sports news from Fox Sports Online. For its part, Fox Entertainment Group (FOX) was up $1.56 at $26.75 after reporting better-than-expected quarterly profit of 17 cents a share. It credited sales of the Titanic video with keeping its bottom line afloat.
MCI WorldCom (WCOM) advanced $3.06 to $79.31 after coming through with a fourth-quarter profit of 23 cents a share, in line with estimates and a marked improvement over the company's year-ago loss of 18 cents. Separately, MCI said it was selling its Systemhouse consulting business to Electronic Data Systems for more than $1.6 billion, and arranging a number of other tie-ups with EDS valued at about $17 billion.
In tech, Sun Microsystems (SUNW) rose $5.63 to $103.06 on word that it had committed more than $1.2 billion to help America Online purchase Netscape. The value of the deal was originally $4.2 billion, but has increased with AOL's share price to the $7 billion range. Sun has agreed to market Netscape's business software.
Dell Computer (DELL) gained $3.56 to $100.56, and International Business Machines (IBM) was $3.25 higher at $172.13. Intel (INTC) climbed $2.88 to $131.69, and Microsoft (MSFT) was up $1.81 at $162.44.
