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Nasdaq climbs despite BroadVision, Brio hit

A lost contract and a bad earnings report cripple the two software companies. But the market appears oblivious, crossing 4,000 for the first time since last month.

Investors punished BroadVision today after the company lost its contract to run American Airlines' Web site.

In midday trading, shares of the Redwood City, Calif.-based company fell $11.75, or nearly 22 percent, to $41.88. Volume reached 27.8 million shares--nearly three times the stock's average daily volume--making it the most actively traded stock on the Nasdaq composite index.

In the overall markets, the Nasdaq rose 62.36 to 4,022.93, crossing 4,000 for the first time since last month. The Standard & Poor's 500 index rose 20.37 to 1,477.04, and the Dow Jones industrial average gained 127.28 to 10,608.75.

BroadVision makes software that helps companies such as Boeing, Circuit City and Citigroup construct Web sites that offer e-commerce transactions, customer service and content management.

American Airlines announced yesterday that it has signed a deal to use Art Technology Group's software as the technology for its Web site. ATG shares rose $12.25, or 13 percent, to $106.75 today.

"Taking it at face value, it probably looks like BroadVision botched the deal," said analyst Greg Vogel, who covers BroadVision and ATG for Banc of America Securities. "It doesn't sound like BroadVision managed the account very well, and AMR decided to go elsewhere." AMR is American Airlines' parent company.

BroadVision's stock has fallen 26 percent this year. During the past 52 weeks, the stock has traded between $6.81 and $93.21.

Brio Technology also took a pounding today, after the company reported drastically lower-than-expected earnings for the first quarter.

The stock fell $11.53, or about 58 percent, to $8.28. It has traded as high as $64.50 in the past year. Volume exceeded 12.7 million shares today, about 42 times the stock's average volume.

The maker of e-commerce software for Internet browsers and databases reported a loss per share of 16 cents compared with a 2-cent loss a year ago. Six analysts surveyed by First Call expected the company to earn 8 cents a share.

The Santa Clara, Calif.-based company generated $33 million in revenue during the quarter, compared with $27.6 million in last year's quarter and $39.6 million for the previous quarter.

The company attributed the glitch to unexpected delays in closing deals that would have brought in $5 million in revenue. Brio expects to conclude those agreements in the next few quarters, but added that its entrance into new markets has extended the time required to close deals.

Meanwhile, PeopleSoft shares rose $2.09, or 13 percent, to $17.97 after Lehman upgraded the stock to "outperform" from "neutral."

Saying the company's "karma feels good," analyst Neil Herman raised his price target to $23 from $20. Herman also said that the company has the ability to exceed his license-revenue forecast of $94.4 million and earnings estimate of 6 cents a share for the second quarter.

Wall Street expects the Pleasanton, Calif.-based company to earn 5 cents a share, the consensus estimate of 13 analysts surveyed by First Call. PeopleSoft posted earnings of 1 cent a share in the second quarter last year.

Herman said he believes greater-than-expected earnings could "get the stock moving north," but his note did contain some words of caution against "one-quarter wonders in the software sector that were viewed prematurely as turnarounds."

"Given the difficult nature of executing any turnaround in the software sector and the back-end loaded nature of the quarters, as well as the weakness experienced in the?space over the last several years, we are only taking the stock to an outperform instead of a buy," he wrote.