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AT&T, MCI lift telecoms
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May 5, 1999: 4:24 p.m. ET
Internet sector stages a mini-comeback as analysts laud results of Priceline.com
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NEW YORK (CNNfn) - Technology issues turned in a mostly positive performance Wednesday, with telecom shares getting a boost from the top two long-distance giants while Internet stocks began showing signs of life again.
AT&T (T) shares rose 5-5/16 to 56-7/8 after the long-distance giant won the battle to acquire cable concern MediaOne Group Inc. (UMG).
Under a deal struck with cable firm Comcast (CMCSK), which originally agreed to acquire MediaOne, AT&T will swap subscribers with Comcast in various areas. The deal effectively averts a bidding war between AT&T and Comcast.
Meanwhile, MCI WorldCom (WCOM) rose 6-11/16 to 89-5/8 after the No. 2 U.S. long-distance carrier reportedly dropped its bid to acquire cellular phone maker Nextel Communications Inc. (NXTL).
Analysts had said a Nextel acquisition would have taken away from MCI's profits in the near term. Nextel shares 1-3/16 to 35-7/8.
Other telecom shares climbing higher included Qualcomm Inc. (QCOM), which jumped 14-3/4 to 224-5/8; and BellSouth Corp. (BLS), which added 1-1/4 to 46-7/16.
Chip shares also finished mostly higher, led by National Semiconductor (NSM), which finished 3-1/16 higher at 17-11/16. The firm decided to exit the personal-computer processor business, cutting 550 jobs in the process. The PC-chip business had been cutting into National Semiconductor's profits since it acquired Cyrix Corp. a year and a half ago.
The company did not indicate whether it was seeking a buyer for Cyrix.
Other chip shares finishing higher included Advanced Micro Devices Inc. (AMD), which gained 11/16 to 17-5/16; and Intel Corp. (INTC), which closed up 2-7/16 at 64.
Internet shares staged a mini-comeback, led by Priceline.com (PCLN), which gained 17-3/16 to 151-3/16. The site that lets consumers name their price for a variety of services reported a narrower-than-expected first-quarter loss amid a skyrocketing customer base.
Goldman Sachs, Warburg Dillon Read and Merrill Lynch all raised their price targets for Priceline.
Elsewhere in the Internet world, Infoseek Corp. (SEEK) jumped 10-3/16 to 55-1/8; E*Trade Group Inc. (EGRP) added 9 to 112; and @Home Corp. (ATHM) soared 19-1/4 to 154-15/16.
One of the few dark spots among technology issues came from networking firm Newbridge Networks Corp. (NN), which tumbled 8-1/16 to 28-3/4 after warning that its fourth-quarter earnings would fall far short of analysts' estimates.
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