EarthLink leads ISP charge

Shares of EarthLink Network Inc. (Nasdaq: ELNK) stormed up 13 1/8, or 28 percent, to 60 3/4 Tuesday after Cruttenden Roth upgraded the Internet service provider from a "buy" recommendation to a "strong buy."

The stock was also fueled by unsubstantiated rumors that Gateway Inc. (NYSE: GTW) might be looking to acquire EarthLink. Officials at both companies refused to comment on the speculation, but that didn't stop online chatters from clogging up message boards with the rumor.

One rumor claims that Gateway will pay $75 a share for the ISP. Not likely. But this kind of rumor chasing has certainly played a roll in Tuesday's rally.

But it wasn't the only Internet service provider to make strong gains in Tuesday trading.

Concentric Networks Corp. (Nasdaq: CNCX) shot up 1 11/16, or 5 percent, to 34 3/16 after the business-based ISP announced expanded deals with Williams Communications (NYSE: WMB) and Microsoft Corp. (Nasdaq: MSFT).

Under terms of the deal, Concentric and Williams will buy each other's products and also work together to help a nationwide dial-up network. Microsoft will make a $50 million preferred stock investment in Concentric, and the two companies will continue on various projects.

Prodigy Communications Corp. (Nasdaq: PRGY) shares hustled up 1 7/8, or 8 percent, to 24 11/16 and MindSpring Enterprises Inc. (Nasdaq: MSPG) tacked on 11 7/16, or 16 percent, to 81 3/8. America Online Inc. (NYSE: AOL) trimmed 3/8 to 115.

Last quarter, EarthLink topped analysts' estimates in its first quarter, losing $4.6 million, or 15 cents a share, on sales of $68.2 million.

First Call consensus pegs it to lose 19 cents a share in its second quarter and 51 cents a share in the fiscal year.

Its shares moved up to a high of 99 3/8 in April after trading at just 19 1/2 in August.

Eight of the nine analysts following the stock maintain either a "buy" or "strong buy" recommendation.