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Stock Watch

Posted: 02/2001

Stock Watch

Markets Shed Buoyancy

Stocks tanked on the last day of our trading session (Dec. 15), as software
giant Microsoft Corp. (www.microsoft.com)
caused some jitters with an earnings warning.

A report from the U.S. Department of Labor (www.dol.gov)
indicated inflationary tendencies, which stoked fears that the late December
Federal Reserve’s Open Market Committee (www.federalreserve.gov),
may not ease interest rates as widely anticipated.

Heavy volume was noticed the last day of our trading session, heightened by
the so-called "triple witching" expiry of options and futures, an
event that intensifies volatility.

The Dow Jones Industrial Average slipped 272.64 points, or 2.55 percent, and
closed at 10434.96.

The PHONE+ (www.phoneplusmag.com)
Stock Index also faltered, shedding 180.43 points, or 4.88 percent, closing at
3514.94. Declining issues outpaced advancing issues at a better-than 6-to-1
margin.

Cable & Wireless plc (www.cwplc.com)
rose 2.88 points, or 7.57 percent, after it was announced that Telecom New
Zealand Ltd. (www.telecom.co.nz) is
interested in Cable & Wireless Optus (www.cwo.com.au)
mobile telephone assets.

Motient Mobile Internet (www.motient.com)
slid 7.19 points this session despite being reiterated "strong buy" by
Wit SoundView Group (www.witsoundview.com)
analyst Timothy O’Neil. Motient lost 60.85 percent, and closed at $4.63.

Shares of Intermedia Communications Inc. (www.intermedia.com)
faltered this session after a Delaware judge declined to block the merger
between WorldCom Inc. (www.wc.com) and
Intermedia Communications, a move that was requested by stockholders of Digex
Inc. (www.digex.com), controlled by
Intermedia. Delaware Chancery Court Judge William B. Chandler III ruled that
Intermedia executives serving on the board of Digex may have violated their
legal duties to shareholders by waiving anti-takeover defenses.

"The possibility exists for WorldCom to walk away or renegotiate the
price for Intermedia, and investors are worried about that," said
Prudential Securities analyst Christopher Larsen. "When you worry, you
sell," said Larsen. Shares of Intermedia lost 7.94 points, or 48.85
percent, to end at $8.31. Intermedia was our top dollar loser this month.

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Chart: Service Provider Index


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