Dot-com bounce produces skeptics

But for those thinking about catching dot-com fever again, beware. The bounce is not as impressive as it appears and probably won’t last, analysts say. Why?

The stocks are coming off very low levels after imploding last year. Many trade for less than $5 a share even after their recent surge.

In a reverse of the "buyers strike" during the fourth quarter, a lot of the impetus for dumping stocks is gone now that year-end tax selling is over. That has lifted pressure off the stocks.

This is just a mini-bubble, said Michelle Espelien of the Invesco Technology Fund: "Dot-com business models haven’t changed in the last two weeks."

Still, it’s hard to ignore the bounce. Since the tech market bottomed Jan. 2, the USA Today Internet 100 index is up 28 percent, the e-Business 50 is up 26 percent and the recently catatonic e-Consumer 50 is up 43 percent.

Internet access firms are a hot spot in the resurgence. Juno stoked the surge yesterday when it reported its customer base surged in the fourth quarter. Juno shares rose 27 percent Monday to $4.13 — and are up 392 percent since Jan. 2. Other Internet access firms, such as Prodigy, PSINet, NetZero and At Home, are among stocks posting huge jumps since Jan. 2.

Such gains still don’t impress most analysts. The biggest gainers are in stocks trading in the single digits, said Lanny Baker, analyst at Salomon Smith Barney.

And earnings ultimately count, Espelien said. "Juno still doesn’t make money," she said. And NetZero? "All I can say is that it has zero in its name," she said.

The rally is already sputtering in some cases, said Peter Doyle of the Internet Fund.

For instance, shares of access provider RCN are down 23 percent from their 2001 high, though they’re still up 72 percent this year.

Don’t forget 2000, said William Meehan, strategist at Cantor Fitzgerald.

"People just don’t learn," he said. "They have to get hit on the head twice."

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