Stock Watch

Posted: 10/2000

Stock Watch

Techs Flounder as Blue Chips Jump

Investors pulled their dollars from tech stocks in August and headed for the blue chip sector, putting more value into the slower growth but sturdier structure of traditional stocks.

Government economic figures released at the end of our trading session (August 15) produced inconclusive data about whether the economy is slowing, but investors held steady in their belief that the Federal Reserve would not raise rates when it met August 22. They were right.

The Dow Jones Industrial Average rose 254.25 points, or 235 percent, and closed at 11067.00. In stark contrast, the PHONE+ Stock Index tumbled 655.41 points, or 13.95 percent, and ended at 4044.53. Declining issues overwhelmed advancing issues 103 to 28.

Shares of ITXC Corp.
( were slashed after the company said it will buy eFusion Inc.
(, a company whose products add voice communications to websites, for about $165.5 million in stock. The deal, expected to close this year, will have holders of eFusion receiving 5.66 shares of ITXC common stock. ITXC dropped 15.88 points, or 45.28 percent, and ended at $19.19. ITXC was our top dollar loser this month.

ICG Communications Inc.
( also was battered after it said it was lowering its overall figures for this year and next. Although the company’s second quarter earnings beat Wall Street’s projections, news that ICG was cutting expectations for 2000 and 2001 caused the company’s stock to fall and drew downgrades from several analysts. ICG said that earnings for 2000 were being cut to $105 million, from $150 million, and that earnings for 2001 were cut to $350 million, from $450 million. ICG dropped 14.44 points, or 66.57 percent, and was our top percentage loser. ICG ended the month at $7.25.

United States Cellular Corp.
( zoomed ahead this month 4.53 points, or 6.97 percent, after reporting a 24 percent increase in second quarter operating cash flow, ending the quarter at $160.1 million. United States Cellular ended at $69.56, and was our top dollar gainer.

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Chart: Phone+ Sevice Provider Index

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