Internet stocks bounced higher from their mid-day levels but still finishd lower.

internet.com's Internet Stock Index fell 16.24, or 1.66 percent, to 959.59, the Nasdaq Composite slipped 12.65 to 4577.85 and the Dow Jones industrial average rose 176.53 to 10038.65.

Quokka Sports (QKKA) added 1/8 to 13-3/16. Merrill Lynch analysts Henry Blodget and Sofia Ghachem came out with a report on the broadband sports destination.

"Quokka's business appears healthy, and our outlook on the stockcontinues to strengthen. Quokka hit 1mm unique visitors in January, with the CART and MotoGrandPrix seasons set to kick off in March," they wrote in their note to clients.

"The company also announced an agreement with Nokia, the world's largest cell phonemanufacturer, to develop America's Cup coverage for WAP-enabled phones. We also think that a tougher public market environment for B2Cinternet names accrues to the benefit of companies with strong momentumwhich are already public, like Quokka," they wrote.

Redback Networks (RBAK) rocketed 22-3/16 higher to 277-1/4. Lehman Bros. upgraded the stock to a "buy" from "neutral" rating and set a $325 price target.

Yahoo! Inc. (YHOO) was down 3-1/4 to 161-15/16. Reports emerged over the weekend that the portal held talks with Australia's News Corp. (NWS) about a possible alliance.

eBay Inc. (EBAY) lost 5-3/4 to 145-1/16. A London newspaper reported Monday that eBay is in talks to buy Sotheby's Holdings (BID) for $1.6 billion. EBay officials denied the published report.

America Online Inc. (AOL) added 1 to 60-5/8. The online giant Monday announced a number of strategic agreements with wireless players to deliver its content to a variety of Internet-ready devices including cellular phones.

LookSmart (LOOK) jumped 6-3/8 to 48-1/16. U.S. Bancorp Piper Jaffray initiated coverage of the search engine Monday with a "strong buy" rating, setting a $94, 12-month price target.

Online brokers got a boost from positive comments issued Monday by Chase Hambrecht & Quist. E*Trade Group Inc. (EGRP) was up 5/8 to 22-7/8. The brokerage said E*Trade's rapid account growth is propelling it to one of its best quarters ever. Chase set a $40 price target.

Charles Schwab (SCH) gained 3/8 to 38-1/4. Chase increased its first-quarter estimate by 4 cents to 23 cents a share. Chase said the company continues to benefit from increased trading activity.

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