Internet

Markets--but not Net stocks--cool after rallies

Some profit-taking emerges after yesterday's record-breaking run for the Nasdaq and Dow, but Yahoo, Lycos and Broadcast.com hit new highs.

Stocks were mixed in today's trading, with some profit-taking emerging after yesterday's record-breaking run.

Despite a decline in the Dow Jones Industrial Average, technology stocks continued to hold their ground, keeping the Nasdaq steady at best.

The blue chip index fell 0.08 percent or 7.21 points to close at 9,537.76, while the Nasdaq gained .23 percent or 5.23 points to close at 2,326.09.

Yesterday, the Dow climbed 2.51 percent or 233.78 points to close at 9,544.97, surpassing its previous record close of 9,374.27, reached on November 23 of last year. The technology-laden Nasdaq yesterday rose 3.08 percent or 69.35 points to reach 2,320.62.

Analysts attributed today's lower levels to profit-taking as well as to debt-related troubles in Brazil.

They said also that Wall Street was keeping a close eye on a report by Goldman Sachs market strategist Abby Joseph Cohen, who switched her asset allocation in stocks to 70 percent from 72 percent, even while she maintained that she still was bullish.

"You can't ignore the drop in weighting by Abby Joseph Cohen," said Barry Hyman, market strategist at Ehrenkrantz, King & Nussbaum. "She is the most watched analyst on Wall Street and she did bring up the question of valuation."

Both Web portals Lycos and Yahoo surged past their 52-week highs in intraday trading today.

Analysts pointed to different forces at work for the rise in those stocks.

Investors consider Yahoo to be among the blue chips of Internet stocks, and an obvious choice when investing some of their holiday spoils, analysts said.

"When money flows into the Internet sector, it flows disproportionately to the Yahoos, and the Amazon.coms," said Andrea Williams, an analyst at Volpe Brown Whelan. "With all the new money coming into the market with people's bonuses and Christmas gifts, these Internet blue chips are an exciting place."

Yahoo jumped 9.97 percent or 29 points to reach 320 today. Previously, the stock had traded as high as 299 and as low as 28.81 during the past 52 weeks.

Lycos, on the other hand, is being driven by speculation that the company soon may enter into a partnership with a media or telecommunications company, analysts said.

"These kinds of rumors are regularly circulating, but there seems to be some credibility this time," Williams said, noting that the usual suspects, including Time Warner and News Corporation, are at the center of the speculation.

No speculation here: Lycos today announced it has teamed with IBM in a deal that will have Lycos showcased within all Aptiva systems and on the Aptiva Web site.

Terms of the deal were not disclosed, but the partnership is certain to help Lycos expand its page visits.

Lycos jumped 8.33 percent or 5.5 points to close at 71.5 today. The stock has traded as high as 68.75 and as low as 15 during the past 52 weeks.

Also among the big winners today was Broadcast.com, which rose an astounding 44.13 percent or 40.4375 points to hit a new high of 132. The Internet broadcasting network, which has traded as high as 103.75 and as low as 32.75 during the past 52 weeks, soared on optimism that it would report strong fourth-quarter results.

Reuters and Bloomberg contributed to this report.