Price War Weighs Down Telecom Stocks
A wireless price war has sent phone stocks sliding this year, as telecom fourth-quarter earnings reports are set to kick off Tuesday with Verizon Communications.
Wireless services have been a bright spot for phone companies such as AT&T (NYSE:T – News) and Verizon (NYSE:VZ – News), as their landline businesses decline. But the price war that erupted last year has intensified, spreading from prepaid services to services for higher-spending customers that sign contracts.
The challenge for the carriers is that surging demand for Internet access and other data products might not offset falling prices for voice calls, analysts say.
This price war is clearly a concern, so what companies say on earnings calls about the economy and demand for services will be key, says Christopher King, an analyst at Stifel Nicolaus.
“Wireless pricing has always been an issue for the industry,” he said. “At the end of the day, these are cyclical stocks. [Read the full article]
United Auto Workers leaders from Ford Motor Co. factories across the U.S. have voted to protest the automaker’s decision to restore some benefits for white-collar workers, claiming that the move violates Ford’s contract with the union.
At a meeting on Wednesday, presidents, vice presidents and bargaining chairmen voted unanimously in favor of filing grievances with the company, claiming that the benefits should not have been restored after union workers made concessions.
In December, Ford announced that white-collar workers would be eligible for merit raises, and in the third quarter it restored tuition reimbursement and 401-K matches that were cut when Ford was in the midst of a financial crisis.
Since then, Ford’s fortunes have improved. It posted a $1 billion profit in the third quarter and is due to report fourth-quarter and full-year earnings on Thursday. [Read the full article]
Stocks capped their worst three-day slide in 10 months on Friday on fears the White House’s plan to curb bank risk-taking would cut profits, and tech shares slumped after Google Inc’s disappointing results.
Uncertainty about the Senate’s confirmation of Ben Bernanke for another term as the Federal Reserve’s chairman also rattled investors in a week when political squabbles helped erase stocks’ gains for 2010.
“Between uncertainty over Bernanke, Obama’s bank regulation proposal and the election in Massachusetts, the market is like a cork in the water and the Democrats just hit the flush,” said Jack Ablin, chief investment officer at Harris Private Bank in Chicago. [Read the full article]
The stock market suffered its worst setback in more than 10 months as investors rejected President Barack Obama’s plans to restrict big banks and earnings reports that just weren’t good enough.
The Dow Jones industrial average had its fourth big drop in five trading days Friday, sliding 217 points 10,172.98. Over the past three days, the Dow lost 552 points, or 5.2 percent, and over the past five days, it fell 537 points, after gaining 115 points on Tuesday.
It was the worst showing for the market since it began its recovery last March. The Dow lost 4.1 percent this week, its worst week since it hit a 12-year low in March.
General Electric Co.’s fourth-quarter net income fell 19 percent, but the industrial bellwether is seeing signs of stability as it moves into a key rebuilding year. [Read the full article]