Markets & Stocks
AT&T deals don't lift techs
May 6, 1999: 5:02 p.m. ET

Interest-rate pressures hit techs as Greenspan speaks; cable sector gains
graphic graphic
NEW YORK (CNNfn) - Deal-making among two giants of technology couldn't halt the seepage for sector stocks Thursday, as the souring interest-rate picture jostled investor confidence.
     The would-be cable industry bellwether and Dow component AT&T (T) rallied 5 to 61-1/16 after inking a partnership with Microsoft (MSFT) to help set standards for high-speed communications in the future.
     Microsoft shares fell 1-3/16 to 77-15/16.
     Meanwhile, AT&T was putting the finishing touches on the latest awe-inspiring maneuver in the cable industry, agreeing to purchase No. 4 cabler MediaOne Group (UMG). Shares of MediaOne rose 2-1/4 to 79-1/8.
     The leading high-speed Internet access provider @Home (ATHM), 40-percent owned by AT&T, got a boost from the news Ma Bell is increasing her cable empire but then fell 1-3/16 to 153-3/4, after hitting as high as 166-1/4.
     With the MediaOne buy, AT&T also nabs a stake in @Home's premier rival RoadRunner, part owned by CNNfn's parent, Time Warner (TWX). Hints that AT&T may try to combine the two high-speed Internet access providers also buoyed @Home shares.
     Fellow high-speed access provider SoftNet Systems (SOFN) rallied 4-1/16 to 30 after announcing it had signed agreements with eight new cable affiliates who will carry the service to more than 150,000 homes.
     Other key beneficiaries of AT&T's frenzied move into cable were other sector companies.
     Cablevision (CVC), in which AT&T has about a 30 percent stake, rose 1-1/8 to 82-1/16, Adelphia Communications (ADLAC) leapt 2-3/1 6 to 75-1/4; Cox Communications (COX) gained 1-5/8 to 80-5/8.
     As for the international players, getting a lift were Telewest Communications (TWSTY), Britain's second-largest cable company, which Microsoft will land a 29-percent stake in as part of its deal with AT&T.
     Telewest's American depositary receipts rose 6-5/16 to 47-7/8.
     Broadcom (BRCM), which makes chips used in devices for high-speed data and video transmission, rallied 4-3/8 to 84-7/8.
     Several key AT&T rivals didn't fare so well. MCI WorldCom (WCOM) fell 5 to 84-5/8 after reportedly coming up short in its effort to cell-phone service provider Nextel (NXTL). Nextel fell 3/4 to 35-1/8.
     And two regional Bell companies, merger hopefuls SBC Communications (SBC) and Ameritech (AIT), ran into a roadblock. The Federal Communications Commission said the merger should be blocked unless they free up their home markets. SBC fell 1-3/16 to 53-1/2 and Ameritech shed 1-1/4 to 66-1/16.
Other techs take a tumble

     Rumblings from the nation's top banker that recent low inflation alongside low joblessness may not last forever hurt the bond market.
     The words from Federal Reserve Chairman Alan Greenspan raised concerns that the high-growth segment of the economy -- technology companies -- may cool off first as rates climb.
     Among those under pressure were Intel (INTC), down 4-5/16 to 59-11/16, Cisco Systems (CSCO), off 4-1/32 to 106-15/16, and Sun Microsystems (SUNW), whose Java programming language could face trouble from the Microsoft-AT&T alliance, fell 2-3/16 to 55-5/8.
     Dell Computer (DELL), which said it hopes to create 3,000 new jobs as it moves some of its operations into a new facility near Nashville, Tenn., fell 1-7/8 to 39-7/16.
     With those key stocks falling, the Nasdaq Composite index closed down 62.17 points, or 2.5 percent, at 2,472.28.
     On the upside was the former Intel rival National Semiconductor (NSM), rising 2 to 19-11/16 after the company announced it will exit the computer-chip business to focus on its other chip segments.Back to top


CNNfn market movers - May 6, 1999


CNNfn's tech indexes

CNNfn's tech stocks

CNNfn's digital jam

CNN sci-tech

U.S. stock markets

Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney