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Speculation drives Net stocks

Most Internet issues soar again on the ongoing buzz over imminent alliances with media firms or telcos.

Tech Industry

Most Internet stocks soared again today, fueled by ongoing speculation about which would be the next to align with a media company or telecommunications carrier.

Some of the stocks, Yahoo and America Online, broke 52-week highs. AOL also broke past the $100-per-share barrier

Yahoo closed up 10.3125 to 139.5625, AOL rose 4.75 to 101.125, Amazon.com jumped 5.5625 to 81.3750, Excite jumped 5.875 to 79.5, Lycos rose 4.25 to 64.5, and CNET climbed 6.25 to 61.125. (CNET: The Computer Network publishes NEWS.COM).

A notable exception to the run-up is Infoseek, which closed down 0.75 at 32.6875 per share. Infoseek's stock surged sharply on rumor of a deal with a media giant such as Disney, but once the deal was announced, its stock slid. Some reasons: The deal dilutes Infoseek's stock and pushes back profitability.

Analysts speculate that the latest run-up in Net stocks is being fueled by the guessing game as to which Net company and media company or telco will team up next. Besides Disney and Infoseek, CNET and NBC announced a Net alliance this month.

In addition, much of Wall Street remains bullish on the potential of the Net, despite high risk and cutthroat competition.

Other stocks were mixed today as the soaring Net stocks lifted the Nasdaq index, but blue chips edged lower in lackluster trading.

The Dow Jones Industrial Average lost 1.74 points to 8711.13, an 0.02 percent decline.

"The market has been so thin," said Chris Dickerson, an analyst at Global Market Strategies. "The market has not given you any compelling reason to jump in here and buy."

Firm airline and oil stocks helped keep the broader market in positive territory, as the S&P 500 Index gained 2.53 to 1103.18.

The technology-laden Nasdaq composite index gained 24.57 points to 1805.86, a gain of 1.38 percent.

Disney gained 1.375 to 108.625, after falling as low as 104.5 in earlier trading, when several Wall Street analysts lowered their earnings estimates on the company. (See related story)

The 30-year U.S. treasury bond gained 0.21875 to yield 5.66 percent, down from 5.68 percent late Friday.

Reuters contributed to this report.

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