Midsummer Doldrums Leave Markets Weaker
The markets witnessed a broad sell-off this session characterized by light trading, as investors awaited signs of the U.S. economic rebound predicted earlier this year. Instead, the profit recession is lasting longer than anticipated. U.S. companies are expected to record the worst profit decline in a decade.
“It’s a wait-and-see mode,” says Peter Coolidge, senior equity trader at Brean Murray & Co. (www.bmur.com). “There is just no catalyst to move stocks one way or another. The jury is still out as to whether the economy has turned. The market is grappling for more data. It’s sort of directionless trading.”
Reflecting the dismal state of technology earnings, the Nasdaq hit its lowest point since April 16, closing at 1918.89, down 110.23 points for the session. The Dow Jones industrial average slipped 126.17, or 1.2 percent finishing at 10,345.95.
The PHONE+ Stock index kept pace with the broader markets, falling 85.69 points, or 4.23 percent to end the session at 1939.76. Decliners outpaced advancers 68 to 37.
Hit hard during the monthly trading period that ended Aug. 15, was Western Wireless Corp. (www.wwireless.com). The company’s stock dropped $12.20, or 28.78 percent, to end the period at $30.19. The company recorded a second-quarter loss of $.18 a share, versus analysts expectations for a $.15 a share loss. The wireless telephone service provider added 30,000 subscribers during the quarter, missing ABN AMRO’s estimates of 45,000. Following the news, several brokerage firms lowered their rating on the stock, including Credit Suisse First Boston (www.csfb.com) and Merrill Lynch & Co. Inc.
The earnings bug also bit Scientific-Atlanta Inc. (www.sciatl.com). The company reported fourth-quarter revenue that fell short of forecasts, even while beating EPS estimates by a penny. Sales rose 12 percent from the same period a year ago, but came in about $50 million below projections.
The company’s stock was hit with multiple downgrades and fell $10.69, or 29.76 percent, to end the session at $25.23.
In merger-related news, Conestoga Enterprises Inc. (www.ceni.com) saw its share price rise $4.95, or 16.39 percent following news that NTELOS (www.intelos.com) had agreed to acquire the firm for $335 million, or $40 a share.
During this session, NTELOS shares dropped $6.95, or 28.37 percent.
|PHONE+ Service Provider Index|
|Top 10 Percentage Gainers||7/16/01
|US Wats Inc.||0.20||0.32||0.12||60.00|
|Electric Lightwave Inc.||0.96||1.19||0.23||23.96|
|Globstar Telecom Ltd.||0.27||0.31||0.04||14.81|
|General Communication Inc.||11.85||12.05||0.20||1.69|
|SBC Communications Inc.||42.98||43.36||0.38||0.88|
|Level 3 Communications Inc.||4.14||4.15||0.01||0.24|
|US Lec Corp.||3.00||3.00||0.00||0.00|
|Price Communications Inc.||18.85||18.69||-0.16||-0.85|
Top 10 Percentage Losers
|Arch Communications Inc.||0.10||0.03||-0.07||-74.00|
|Metromedia Fiber Network Inc.||1.27||0.70||-0.57||-44.88|
|Talk America Inc.||0.88||0.57||-0.31||-35.23|
|Vocaltec Communications Ltd.||2.00||1.30||-0.70||-35.00|
|PNI Technologies Inc.||0.03||0.02||-0.01||-33.33|
|Western Wireless Corp.||42.39||30.19||-12.20||-28.78|
|Net Change||Percent Change|
|PHONE+ Stock Index||2025.46||1939.76||-85.69||-4.23|
|Service Provider Index||1811.20||1728.38||-82.82||-4.57|
|Dow Jones Industrial Average||10472.12||10345.95||-126.17||-1.20|
|S&P 500 Stock Index||1202.45||1178.02||-24.43||-2.03|
|Nasdaq Composite Index||2029.12||1918.89||-110.23||-5.43|
|NYSE Composite Index||611.58||605.90||-5.68||-0.93|
|Source: CNET Investor (investor.cnet.com) Boulder, Colorado. This information is based on sources believed to be reliable, and while extensive efforts are made to ensure its accuracy, no guarantees can be made. CNET Investor assumes no liability for any inaccuracies.|
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