Wall Street was striding higher in mid-afternoon trading Friday. Tech and Internet stocks paced the rally, showing renewed strength after a bruising week in which investors gave an unusually cold shoulder to many of the market's darlings.
The Dow Jones Industrial Average rose 59.45 points to 9358.08, and the Nasdaq Composite Index was up 26.49 at 2287.49. The S&P 500 advanced 5.73 to 1243.01.
With a number of top tech and Net stocks now priced at sub-orbital levels, traders decided to forget their previous worries about too-high valuations and to replenish their portfolios with a few favorites. The market, as we all know, has a very short attention span.
Investors are also starting to focus on Fed chief Alan Greenspan's appearance before Congress next Tuesday, and will be listening carefully for any clues, cryptic or otherwise, as to the course of interest rates. The smart money is on a rate hike being announced when the Fed meets in March.
Net stocks found their footing after CIBC Oppenheimer analyst Henry Blodget said it "may be time to buy" industry leaders like Yahoo (YHOO) and Amazon.com (AMZN), both of which have come down in price by almost half in the past month. Yahoo gained US$5.88 to $134.75, and Amazon was $9.06 higher at $98.56.
"They're still not cheap stocks," said Arthur Newman, an analyst with Gerard Klauer Mattison. "But at least the market leaders are the ones that will survive. In another year, there aren't going to be as many Internet companies around."
Speaking of which, Lycos (LCOS) climbed $5.13 to $89.38 amid anonymously sourced stories that the portal's acquisition of Wired Digital, parent of Wired News, still has the backing of managers at both companies. Speculation mounted this week that the tie-up was in trouble following reports that a spat among Wired shareholders may scuttle the deal.
Meanwhile, it's anyone's guess as to how Lycos' merger with USA Networks (USAI) is progressing. Both sides have become suddenly quiet after being quite vocal about the merits of the arrangement. Could it be that a higher premium for Lycos shareholders is under negotiation?
Here's a surprise: Steven Spielberg has popped up with the purchase of a 5.8-percent stake in Ticketmaster Online-CitySearch (TMCS), one of USA Networks' electronic-retailing properties to be merged with Lycos. Considering how many movie tickets Spielberg sells, he probably figures he's entitled to a bigger slice of the box-office pie. Ticketmaster rose $1.25 to $35.63, while USA was up 81 cents at $38.25.
Merrill Lynch (MER) looks like it's finally getting with the program. The biggest US brokerage rose $3 to $72.88 after saying it will buy investment firm DE Shaw's online-trading operations. Merrill said it plans to begin offering online trading to a portion of its almost 5 million clients by the end of March.
Educational software maker Advantage Learning System (ALSI) jumped 9.3 percent to $66.13 after posting fourth-quarter profit of 27 cents a share, topping estimates by 4 cents. The company said its customer base grew to about 41,400 schools, or more than a third of all US schools.
And how are things in Japan? Not so good. Electronics giant NEC (NIPNY) said it will see an almost $1.3 billion group net loss for the current fiscal year, and will slash its workforce by 15,000. In keeping with custom, the company's president, Hisashi Kaneko, will resign to take responsibility for NEC's performance, but will still receive a paycheck as an "adviser." NEC slipped 25 cents to $43.88.
