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Web Attacks Continue to Fuel Security Stocks

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Bloomberg News, Reuters

Shares of security software makers continued rocketing Thursday in the wake of attacks on major Web sites, though some observers said the two-day run-up had the look of a mania.

Check Point Software Technologies Ltd. (CHKP), which makes software used to protect computer networks, jumped $32.25 to $180.25. SonicWall Inc. (SNWL), which makes software used to guard consumers’ computers, gained $26.25 to $99.

Software maker Network Associates (NETA) rallied $3.81 to $27.94 as it introduced a free product designed to screen computers to see whether they are being controlled by hackers intending to swamp Web sites.

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Tumbleweed Communications Corp. (TMWD), which makes software used to send secure e-mail, surged $10.13 to $78.13. The stock was rated new “strong buy” by analyst Hany M. Nada at U.S. Bancorp Piper Jaffray. The investment firm’s news release was entitled, “E-mail Hackers Beware.”

But some analysts suggested the sector might be getting more hype than warranted. “The reality is that lots of companies [whose shares are rising] offer products that would have no impact on the recent attacks,” said Paul Saunders of Wit Soundview.

As one fund manager put it: “It’s like when companies announce that the chairman’s dog is named Linux and the stock goes up $20.”

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