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TCI deal pumps techs
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June 24, 1998: 8:07 p.m. ET
AT&T acquisition helps networking, cable and telecom equipment stocks
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NEW YORK (CNNfn) - News of AT&T's $68 billion acquisition of Tele-Communications Inc. (TCOMA) set off a flurry of activity in related stocks Wednesday.
The Nasdaq composite jumped 33.19 to 1,877.76, powered by a rally in networking stocks and in big-name issues like Intel and Microsoft.
Tele-Communications' own stock rallied 1-1/16 to 39-3/4 while its Liberty Media (LBTYA) programming arm gained 2-1/8 to 38-3/16..
TCI also owns a controlling stake in @Home Network (ATHM), the cable-based Internet service provider. That stock 11-15/16 to 51-3/16.
TCI's international business, which trades under the symbol (TINTA) rose 2-3/4 to 19 on the day, a gain of almost 17 percent.
That good fortune washed over the rest of the cable stocks, with Cablevision Systems (CVC) soaring 14 to 76 and Cox Communications (COX) rising 2-3/8 to 48-5/8. The nation's second-biggest cable company, Time Warner (TWX), rallied 5-1/8 to 88-3/8. (Time Warner is the parent of CNNfn.)
Smaller cable companies benefited, too. Century Communications class A shares (CTYA) gained 2-1/8 to 18-1/8, Adelphia Communications (ADLAC) jumped 4 to 33-3/4, and Jones Intercable class A (JOINA) rose 1-5/16 to 26-1/8.
To make the most of this merger, AT&T will have to upgrade its network, and that helped boost networking equipment stocks.
Cisco Systems (CSCO) gained 15/16 to 87-13/16, and Lucent Technologies (LU) rose 1-5/8 to 80-1/8.
The prospect of higher cable-box sales was good news for the folks who make them. General Instrument (GIC) jumped 2-15/16 to 26-1/8 while Scientific Atlanta (SFA) gained 2-1/8 to 24-1/16.
Recent IPO Com21 (CMTO) soared 3-15/16 to 20-3/4. The company makes cable modems, and it sold $2 million worth of equipment to TCI last quarter.
News that AT&T has found a way to provide local phone service without using phone lines owned by the Baby Bells put those stocks in the dog house Wednesday.
Bell Atlantic (BEL) lost 5-7/8 to 92-1/2. Ameritech (AIT) and BellSouth (BLS) lost more than 2 points, SBC Communications (SBC) fell 1-1/2 to 39- 3/4, and U S West (USW) slipped 1-5/8 to 48-11/16.
Microsoft (MSFT) jumped 4-3/16 to 104-15/16 as investors continue to celebrate Tuesday's federal appeals court ruling. Intel (INTC), meanwhile, rose 2-1/8 on the day to close at 77-3/8.
Cell-phone maker QualComm (QCOM) jumped 4-1/8 to 55-11/16 after BT Alex.Brown upgraded it from "market perform" to a "buy."
After the bell, 3Com (COMS) said it beat Wall Street expectations for the fourth quarter with earnings per share of 18 cents, excluding one-time items. The better-than-expected results drove 3Com shares higher in after-hours trading to 29-1/2, up from their close of 27-1/8.
Lam Research Corp., (LRCX) a maker of equipment for the semiconductor industry, said it plans to cut up to 1,100 jobs, citing weak orders for semiconductor capital equipment.
The company said it will cut 20 to 25 percent of its global staff of about 4,400 workers. Lam also said it expects to take a restructuring charge of $55 to $65 million for its fourth quarter, ending June 30.
The restructuring charge covers severance pay, facilities consolidation and asset write-offs. Excluding the charges, Lam said, it expects to meet analysts' fourth quarter operating earnings expectations.
Analysts expect Lam to post an operating loss of six cents a share, according to First Call, which tracks Wall Street estimates.
Software maker Corel Corp. (COSFF) said it is cutting 540 jobs from its U.S. computer division. Ahead of the news, the stock closed unchanged at 2-1/16.
Finally, Quarterdeck Corp. (QDEK) said it expects to post a loss for the current quarter due to slowing sales in the United States and Europe. The company also said it will cut an undetermined number of jobs. Quarterdeck specializes in PC help software. The shares closed unchanged at 15/16.
--by staff writer Brendan Hasenstab
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