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Technology Stocks : AT&T -- Ignore unavailable to you. Want to Upgrade?

To: eddy thompson who wrote (2152)	4/7/1999 9:05:00 PM
From: Ian@SI	Read Replies (2) \| Respond to of 4298

04:03 PM ET 04/07/99 AT&T stock benefits from weakness in MCI WorldCom NEW YORK, April 7 (Reuters) - Shares of AT&T Corp. jumped more than 6 percent on Wednesday due, in part, to investors shifting their telecommunications holding into AT&T and away from its rival MCI WorldCom Inc., analysts said. Shares of AT&T , the most-widely held U.S. stock, gained $4.875 to $84.875 in heavy trading on the New York Stock Exchange. Shares of MCI WorldCom Inc. , the No. 2 U.S. long distance company behind AT&T, dropped $3.56 or nearly 4 percent to $86 on Nasdaq. The decline in MCI WorldCom's stock added to losses seen in on Tuesday after sources had said the company was in preliminary talks to buy Nextel Communications Inc. , a wireless phone company. "There's a bit of a rotation out of WorldCom and into AT&T as a result of some people getting spooked by a possible Nextel deal," said Richard Klugman, a telecommunications analyst with Goldman Sachs. "If investors want a large cap telecom stock, AT&T is seen as a safer bet until the MCI WorldCom situation sorts out," said one analyst who declined to be named. Investors sold MCI WorldCom's stock on concerns an acquisition of Nextel could dampen the long distance company's profits by up to 25 percent over the near-term, analysts said. Analysts said AT&T's stock also got a boost after the company on Tuesday said it would begin charging a $3 monthly fee to all of its basic rate customers who spend less than $3 a month on long distance calls. About 15 percent of AT&T's customer spend less than $3 a month. The charge will help cover the $300 million AT&T spends annually for billing and customer service for these accounts. "AT&T effectively raised prices for part of the consumer market where they consistently lose money. It's not a huge amount of money, but over time it can add up," said one trader who declined to be named. The rally in AT&T's stock came after a stretch of weakness following the completion of its acquisition of cable television giant Tele-Communications Inc. Shares often weaken slightly in the days following a merger due to technical issues, traders said. Mutual fund companies or shareholders who held stock of both a buyer and the target may sell some stock after a merger closes to avoid having too much exposure to the combined company, traders said. "AT&T had been weak following the TCI deal as people sorted out their holdings. The drop made it look cheaper relative to other large cap telecom or technology stocks," one trader said. AT&T's stock, however, was unaffected by moves by its cable television programming subsidiary Liberty Media Inc. , analysts said. On Tuesday, Liberty Media unveiled deals with News Corp. and TCI Music Inc. aimed at rearranging the growing collection of cable and Internet assets in its media house. Liberty Media's stock jumped $4.375 to $63.375 on Wednesday, but that does not affect AT&T's share price, analysts said. Liberty Media, even though it is 100 percent owned by AT&T, trades separately as a "tracking stock" and movements in its stock are separate from movements in AT&T's share price. (( Jessica Hall, New York newsroom 212-859-1729))