Internet issues led the Nasdaq's turnaround at midday Wednesday, hauling the index out of the red as they rode up on bullish analyst reports. The Nasdaq rose 4.32 to 2675.54, and the Dow Jones industrial average slumped 69.66 to 11047.42.
Inter@ctive Week's @Net Index gained 5.33 to 295.03.
Bargain hunters began snapping up Internet issues for the holiday season on positive comments from Merrill Lynch analyst Henry Blodget. He named eight stocks he believes "offer a sound way to play the fundamental strength and renewed investor enthusiasm we expect to see during the fall and holiday shopping season." Computer makers were also faring well, with Dell leading the pack.
Dell Computer Corp. (Nasdaq: DELL), up 3 11/16 to 44 13/16, was the most active stock on the Nasdaq, carried up 9 percent Wednesday on analysts' cheers after it reporting better-than-expected second quarter results and predicted strong performance for the second half. IBM Corp. (NYSE: IBM) gained 1/4 to 128 3/4, Gateway Inc. (NYSE: GTW) rose 1 1/4 to 86 1/2 and Compaq Computer Corp. (NYSE: CPQ) was even at 24 1/8. Apple Computer Inc. (Nasdaq: AAPL) also moved up 9/16 to 60 7/8.
Lycos Inc. (Nasdaq: LCOS) wasn't far behind on the actives list, gaining 4 to 46 5/16 on high volume after Bear Stearns on Wednesday said it raised its fiscal 2000 revenue estimate for Lycos to $236.3 million from $209.5 million, and reiterated its "buy" rating. PaineWebber also raised its rating on Lycos from "neutral" to "buy." Lycos topped estimates with a small profit in its fourth quarter.
Merrill Lynch's Henry Blodget raised his rating on retailer Amazon.com and portal Yahoo! to near-term buy from accumulate, sending Yahoo! Inc. (Nasdaq: YHOO) up 8 to 146 7/8, and Amazon.com Inc. (Nasdaq: AMZN) up 7 to 116 1/4.
They were two among eight he expected to perform well over the next quarter. The others were America Online Inc. (NYSE: AOL), up 3 3/8 to 100 7/8, Barnesandnoble.com Inc. (Nasdaq: BNBN), up 1 7/8 to 18 5/8, Excite@Home Corp. (Nasdaq: ATHM), up 1 7/8 to 41 1/2, eToys Inc. (Nasdaq: ETYS), up 6 3/8 to 46 5/8, software provider Inktomi Corp. (Nasdaq: INKT) up 2 15/16 to 118 15/16, as well as media network Lycos.
Significant nets not on the list included: Infoseek Corp. (Nasdaq: SEEK), up 1 3/8 to 34 7/16, Mindspring (Nasdaq: MSPG) up 13/32 to 32 7/16. CMGi Inc. (Nasdaq: CMGI) also added 5 11/16 to 89 3/8.
Among other stocks in the news, Lucent Technologies Inc. (NYSE: LU), down 1 7/16 to 65 1/16, agreed Wednesday to buy Excel Switching Corp. (Nasdaq: XLSW), up 7 9/16 to 35 1/8, a maker of programmable switches for telecommunications service providers, for $1.7 billion in stock. Cisco Systems Inc. (Nasdaq: CSCO) shed 7/16 to 63 13/16, and 3Com Corp. (Nasdaq: COMS) added 1/2 to 24 1/4.
Analog Devices (NYSE: ADI), down 1 3/4 to 45, posted third quarter earnings of 30 cents a share Wednesday, beating First Call consensus by a penny. The semiconductor manufacturer cited an increase in orders for its results and was bullish on the fourth quarter. Microsoft Corp. (Nasdaq: MSFT) rose 3/8 to 84 15/16, Intel Corp. (Nasdaq: INTC) sunk 1/8 to 78 7/8, and Advanced Micro Devices Inc. (NYSE: AMD) sunk 3/16 to 18 7/16.
Oracle Corp. (Nasdaq: ORCL), which announced it will incorporate Hewlett-Packard's Internet services offering into is database, fell 2 1/4 to 35 1/16. AT&T Corp. (NYSE: T) sunk 13/16 to 48 15/16 and Sun Microsystems Inc. (Nasdaq: SUNW) dipped 3/4 to 74 1/16.