Channel Partners

June 1, 2000

2 Min Read
Stock Watch - Market Battered on High Inflation Numbers

Posted: 06/2000

Market Battered
on High Inflation Numbers

Cash flew out of Wall Street at the end of our trading session after the government’s Consumer Price Index’s core rate jumped by 0.4 percent, double what economists had expected. It also was the largest gain in five years. Three major indices registered their largest one-day point slides in history after the news was reported. Tech issues continued to hemorrhage, and analysts couldn’t predict how low the slide could continue.

“[April 14] gave back the final bit of frenzy that started last October and broke the back of the complacent investor,” said Scott Bleier, chief investment strategist at Prime Charter Ltd. “Those wishing to sell ranged from the day trader type all the way up to the money manager guy. Momentum in this market runs both ways, and momentum tends to overshoot both ways.”

The PHONE+ Stock Index was unable to recover and fell 623.53 points, or 12.13 percent, to close at 4515.39. Declining issues overpowered advancing issues 133 to 12.

Many telecoms hit 52-week lows on the killer Friday, none more than Teligent Inc.
(, which lost 52.13 points, or 57.68 percent, to close at $38.25. Earlier in the session, Teligent announced a two-for-one stock split and an offering of 4 million shares of common stock. The split will be determined by shareholders at the annual meeting on May 25. Ladenburg Thalmann & Co. Inc. raised Teligent’s rating from “buy” to “strong buy.”

Pacific Gateway Exchange Inc.
( was hit by a number of class action lawsuits from investors alleging it overstated profits by $10.1 million for its first three quarters in 1999. Some allege this overstatement allowed Pacific Gateway to finance its acquisition of NOS Communications
( The company shed 13.56 points, or 68.67 percent, and ended at $6.19. Pacific Gateway was our top percentage loser.

GTE Corp.
( avoided the punishment inflicted by investors as the company added 8.25 points, or 12.64 percent. GTE announced that its online unit, Genuity Inc.
(, will expand its fiber optic network during the next five years. GTE closed at $73.50, and was our top dollar gainer.

Chart: Phone+ Sevice
Provider Index

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