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Stocks Seesaw on Interest Rate Woes

Channel Partners

August 1, 2000

2 Min Read
Stocks Seesaw on Interest Rate Woes

Posted: 08/2000

Stocks Seesaw on Interest Rate Woes

Wall Street fell and climbed during our reporting period (ending June 15), after the Federal Reserve raised rates as expected by 50 basis points. Recent economic news shows that inflationary pressures may be moderating, and that the Fed may not have to keep hiking interest rates.

Technology issues were favored because of their more rapid growth. They are seen as less vulnerable to higher interest rates. “We’re continuing to see the tug-of-war between those who are concerned about too much growth and those who feel the Fed’s work is behind them,”said Charles Lemonides at M&R Capital Management.

The Dow Jones Industrial Average was left in the dust, shedding 92.96 points, or 0.86 percent, and ending at 10,714.82.

In vivid contrast, strong growth in the Internet and wireless devices helped the PHONE+ Stock Index, which climbed 7.15 percent and closed at 4,931.49, an increase of 329.12 points. However, advancing issues barely edged past declining issues 68 to 67.

Powertel Inc.
(www.powertel.com) was in view, as a trio of strong reiterations boosted the company, with Robinson-Humphrey analyst Perry Walter restating his
"outperform"rating on Powertel and a price target of $120 per share. First Union analyst Jennifer Murtaugh reiterated her “strong
buy"rating, with another “strong buy”from Raymond James analyst Richard Prentiss Jr. Powertel jumped 22.56 points, or 33.58 percent, and was our top dollar gainer
this month.

Shares of Cable & Wireless plc (www.cwplc.com) also shot ahead after news of an agreement between the company and Intel Corp.
(www.intel.com) to accelerate e-commerce in Hong Kong and in east Asia. The partnership highlights small and medium-sized businesses, and consumers. Cable & Wireless CEO Linus Cheung said, “With our well-established network infrastructure and proven expertise in providing Internet solutions, Cable & Wireless HKT strives to offer the highest quality Internet services to fit the needs of both our corporate and individual customers. Coupled with Intel, which provides technology expertise in outsourcing and platforms, the partnership is poised to further boost Internet development in the region.” Cable
& Wireless increased 14.94 points, or 33.90 percent, and closed at $59.00.

Teleglobe International Inc.
(www.teleglobe.com) tumbled after reporting a net loss for the first quarter. Net loss was $47.8 million, or 19 cents per share, compared with net income of $26.5 million, or 10 cents per share earned in the same quarter a year ago. Teleglobe lost 5.06 points, or 21.09 percent, and was our top dollar loser. Teleglobe closed at $18.94.

Chart: Phone+ Sevice
Provider Index

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