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Net stocks jump on holiday hopes

Internet stocks lead the Nasdaq higher today as investors see green for the holiday season.

2 min read
Internet stocks, which analysts say are likely to benefit from the holiday shopping season, pushed the Nasdaq higher today, while the broader market fell.

As analysts warned that a recent blue chip run-up may have some issues overvalued, investors put the brakes on any buying today and a late sell-off pushed the Dow Jones Industrial Average down 33.98 to 8,863.98.

The Nasdaq Composite Index, however, which climbed as much as 14.5 today, closed 4.45 points higher at 1,865.5.

Internet issues posted strong gains today. Of the ten top most active stocks on the Nasdaq market, five were Internet stocks, which as a group has experienced a stunning surge in stock price as e-commerce companies gear up for the holiday season.

"This is in general a good season to own these [Internet] stocks because of all the good news in the marketplace about increased commerce and advertising growth," said Henry Blodget, an analyst at CIBC Oppenheimer.

Web portals Excite and Yahoo were the fourth and seventh most actively traded stocks. Excite soared 8.68 percent to 51.63, while Yahoo gained 7.78 percent to 177.56.

Online auctioneer eBay shot 27.06 percent higher to 130.88.

"It seems there is a cultural shift in progress," said Phil Leigh, an analyst at Raymond James. "People in the past, particularly in the bigger cities, might have gone out during their lunch hour to do some Christmas shopping, they are now displacing that with visits from their desk to cyber-stores like Amazon.com and Onsale."

Analysts said that last year's holiday season was the first time there was any significant use of online shopping--yet most agree that there should be a dramatic rise in sales this year.

Shares of Amazon.com climbed 3.84 percent to 131.75 while online auctioneer Onsale gained 14.24 percent to 20.56.

"These [Internet] stocks have tendency to go on runs and we are clearly on a run here," said Blodget.

Shares of K-Tel rocketed 98.38 percent after the entertainment marketer said today that Microsoft would put K-Tel's music service on the online Microsoft Network.