Stocks have rebounded from their session lows, but current action looks to be that of short covering by bears that are locking in some gains from recent weakness.
Not all stocks/sectors have rebounded from earlier losses. Telecom and telecom infrastructure stocks remain weak as the North American Telecom Index (XTC.X) trades down 4.29% and the narrower Wireless Telecom Index (YLX.X) trades at a fresh 52-week low of $70.94, marking a 4.97% decline.
Wireless Telecom Index (YLS.X) - Daily Interval
There is no sign of a bottom being found in the YLS.X and the only buying of stocks in this group should be found among bears that are locking in some gains and managing the risk in their accounts. Networking or semiconductor stocks that depend on many of the wireless companies for their products may also become more suspect to lower prices. It has been our thinking that weakness in the telecom service providers (fixed-line or wireless) will most likely lead to weakness in those stocks that supply equipment and components to the service side.
Today's move lower in wireless stocks are being brought on by Sprint (NYSE:FON) $14.51 -9.43% and Sprint PCS (NYSE:PCS) $10.89 -21.07%. FON reported earnings of $0.27 a share, which missed estimates among analysts that were looking for earnings of $0.31 a share. Yesterday, PCS reported a loss of $-0.32 a share, which was a penny less than consensus looking for a loss of $-0.31. Sprints PCS (PCS) later announced it would cut its capital expenditure budget by $100 million in 2002 and now expects to spend $3.4 billion versus its previously planned $3.5 billion.