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CNNfn market movers
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May 7, 1999: 11:17 a.m. ET
Telecoms call out to investors in wake of AT&T deal; software gets attention
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NEW YORK (CNNfn) - Telecom stocks were calling out to investors Friday and many investors were listening, as AT&T's hookup with MediaOne sparked interest in the sector. Software firms also performed well as investors continued to snap up shares of companies that make it easier for people to surf the Web.
AT&T (T) has been helping telecom and cable stocks all week with its myriad stunning announcements. The telecom giant Tuesday said it agreed to acquire MediaOne for $62.5 billion to create the world's largest cable-television company. Wednesday it announced a strategic partnership with Microsoft Corp. (MSFT) that all but sealed its bid for MediaOne. And rumors abounded Friday that Matsushita Electric Industrial Co. (MC) may be in discussions with AT&T about distributing music over the Internet.
Standford Telecommunications (STII) shares rose 7/8 to 19-1/4 after the digital telecom products maker was rated a "buy" in new coverage by analyst Matthew Robison at Ferris Baker Watts.
Startec Global Communications (STGC) stock rose 5/16 to 7-3/16 after it said its first-quarter loss widened to $1.51 a share, within expectations of what analysts polled by First Call had expected. The telecommunications firm also was reiterated "strong buy'' by analyst Vik Grover at Kaufman Brothers.
Cabletron Systems (CS) shares jumped 2-1/16, or 23 percent, to 11-1/8 after the telecommunications equipment maker said it's considering selling off parts of its business to bolster the company's value. The company is considering selling a stake in its prized Spectrum unit, which makes network-management software. It's also looking at selling a portion of its services business, the company said.
Anixter International (AXE) shares rose 9/16 to 16-5/8 after the distributor of wiring and cable services said its board authorized the buyback of as many as 1 million additional shares, bringing to 7 million the total shares Anixter may buy back this year.
It wasn't all about telecom and cable stocks Friday. Other shares sailed forward, as well, particularly Avondale Industries (AVDL). One of the nation's biggest shipbuilders said it received an unsolicited buyout offer from Litton Industries (LIT) for $38 a share cash, a 20 percent premium to its closing price. Litton also made an offer to buy Newport News Shipbuilding (NNS) by exchanging 0.55 a share for each Newport share, or a 32 percent premium to Newport's closing price. No regulatory obstacles are expected, according to a research report issued by Bear, Stearns analyst Brian Madonick. He said he expects the Avondale transaction to add 5 cents a share to Litton's 1999 earnings. Avondale shares jumped 4-1/2 to 36-1/4. Litton shares fell 3/4 to 64. Newport News shares surged 7 to 34.
Investors also pushed up stocks connected with the online world. Online brokerage E*Trade Group (EGRP) shares jumped 5-5/8 to 110-11/16 after the company was rated a "buy" in new coverage by analyst Richard Repetto at Lehman Brothers. Repetto expects the company's shares to rise to 140 within a year, according to the report.
Qlogic (QLGC), which makes products that link disk drives and other accessories to computers, saw its shares surge 14-7/16 to 90-5/16 after it said earnings for its fiscal fourth quarter ended March 28 rose to 45 cents a share, beating the 40-cent average estimate of analysts polled by First Call.
Multimedia Games (MGAM) shares rose 2-9/16 to 9-5/16 - a 36 percent jump - on expectations that the company is in talks to be acquired. Multimedia Games produces interactive bingo games and related equipment.
3DO (THDO), which produces entertainment software, saw its shares rise 9/16 to 7-7/16 after it reported fiscal fourth-quarter earnings of 9 cents a share, compared with a loss of 25 cents in the year-earlier period. It was the company's first profitable quarter as a software publisher.
Priceline.com (PCLN) shares rose 2-5/16 to 141-3/4 after the online service firm said it received a U.S. patent covering the specific type of airline ticket sold through its travel services unit. The new patent is the second issued covering Priceline.com's business methods, the company said. Priceline.com operates its own portal, which lets consumers bid online for airline tickets and hotel rooms.
Reuters Group PLC (RTRSY)'s American depositary receipts, each representing six shares rose 1-5/16 to 82-1/8 after the information services company said its Instinet Corp. unit and a group of investment firms plan to buy a majority stake in Tradepoint Financial Networks PLC, a U.K.-based electronic stock-trading system. The group said it will buy a 54.4 percent interest in the three-year-old system for 14 million pounds ($22.4 million). The securities firms its participating with are among Wall Street's biggest -- Morgan Stanley Dean Witter (MWD), J.P. Morgan (JPM), mutual-fund giant American Century and electronic stock-trading network Archipelago LLC., owned in part by Goldman Sachs (GS). Morgan Stanley rose 9/16 to 95 7/16. J.P. Morgan fell 1/8 to 135 3/16. 
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