Internet Stock News Announces Investment Opinion: ISN Update 8/25/2000

Business Wire, August 25, 2000

Business Editors

NOTE TO EDITORS: The following is an investment opinion issued

by Internet Stock News

SAN DIEGO--(BUSINESS WIRE)--Aug. 25, 2000

INTERNET STOCK NEWS: Aug. 25, 2000

"Internet Stock Outlook" by Sierra Izzard, Ted Kunzog, RIA

Also available on the Web at: http://www.netstocks.com/article/article.asp?edit_id=1832

1. INTERNET STOCK OUTLOOK -- Aug. 25, 2000 By Ted Kunzog

All of the major indices posted gains once again this week as investors were encouraged by the Fed's widely expected decision to hold short-term interest rates steady at 6.5%. Our proprietary Internet Stock Indices (located in the Market Summary section at the top right of our homepage) were all up, with the exception of our Small Cap Index. Once again, our Large Cap index led the way with a gain of 5.97%. From the market close on Thursday, Aug. 17 through Aug. 24:

ISN Large Cap Index 5.97% ISN Mid Cap Index 0.49% ISN Small Cap Index

-3.57% ISN Micro Cap Index 2.60%

Although Greenspan and Co.'s decision was essentially a non-event, it helped soothe investors' inflationary worries and aided the broad market in moving higher. Most notably, the NASDAQ was finally able to close above its 200-day moving average and climb above 4,000 for the first time since July 25.

Here are the daily market overviews from the last five days:

Friday http://www.netstocks.com/article/article.asp?edit_id=1811

Thursday http://www.netstocks.com/article/article.asp?edit_id=1817

Wednesday http://www.netstocks.com/article/article.asp?edit_id=1829

Tuesday http://www.netstocks.com/article/article.asp?edit_id=1825

Monday http://www.netstocks.com/article/article.asp?edit_id=1830

Much like George Bush Jr.'s standing in the polls, the U.S. economy is indeed cooling. Benign jobs data, a slowdown in consumer spending, as well as a drop off in durable goods orders all evidence this fact. Further, recent data "have indicated that more rapid advances in productivity have been raising the potential growth rate as well as containing costs," the Fed said in its policy statement. As a result, the federal funds rate stays at 6.5%. But what does this mean for the retail investor? It means that the market climate has improved, and for the time being, conditions should be investor friendly.

Proof of these improved conditions can be traced back to Thursday, Aug. 3, when the NASDAQ staged a key reversal -- meaning the index traded lower than the previous day's low as well as closed above the previous day's intra-day high. On that day, the NASDAQ opened 100 points in the red at 3554, and traded as low as 3521, before rallying over 200 points to close at 3759. The index turned a triple-digit loss into a triple-digit gain. Since that time, the NASDAQ has staged an advance in 12 of 15 trading sessions. In fact, the index is starting to make a habit of trading lower in the morning and rallying the rest of the day into the close. Just yesterday, the NASDAQ opened lower at 3935, and traded as low as 3905 shortly thereafter. However, the bulls came back in force, once again aiding the NASDAQ to a gain of 52.8 points, or 1.3% to 4011. This is very bullish behavior for stocks.

Looking forward, the NASDAQ should drift higher once again this week thanks to a less aggressive Fed and cooling economic picture. The NASDAQ's climb above 4,000 as well its 200-day moving average should also provide psychological incentive for additional buying in the technology sector. However, don't expect any dramatic moves, just a slow methodical climb.

Until next week, here are some of the week's top Internet-related news stories:

Have you heard that reading and driving don't mix? Amazon.com, or should I say Amazon.car, sure hasn't. The online book retailer announced that it will launch a new-car buying service backed by service and support from an expensive network of auto dealers affiliated with Amazon partner Greenlight.com. Car buyers can browse and search by make or model, or compare two cars side by side in Greenlight's Showroom. Consumers can also specify the precise options they want and configure their car online. Which makes me wonder, can I get that Porsche with the Harry Potter book holder?!

CMGI scored a touchdown this week, announcing a comprehensive marketing and technology partnership with the NFL's New England Patriots to include CMGI's purchase of the naming rights for the new home of the New England Patriots and the New England Revolution. The new stadium, now under construction and expected to open for play in 2002, will be known as "CMGI Field." The deal was a major hit with investors as well, as shares climbed six points, or 15% to 44 following the announcement.

Inktomi, Adero and America Online said that they have formed a technology and network service alliance, named Content Bridge, to give Internet users up-to-date information. Under terms of the alliance, Inktomi will provide the network infrastructure, Adero will ensure the content is updated across all member networks, and AOL will deliver Content Bridge in its network. The service is expected to launch in the fall, with early participants to include Exodus Communications and Genuity.