Internet, Old Media Marriage Rattles Wall Street

Posted: 03/2000

Internet, Old Media Marriage Rattles Wall Street

The buzz at the end of our trading session was the proposed merger between America
Online Inc. (AOL) (www.aol.com) and Time Warner Inc. (www.timewarner.com).

After the initial elation, shares for both stocks were pummeled as investors worried
about the two companies’ abilities to weave their lives together successfully.

Earnings news in the tech sector also troubled investors. The normally upbeat Nasdaq
Composite was bruised before a last-ditch rally on positive economic news and great Intel
Corp. (www.intel.com) numbers.

The rally was sparked by a hint from Federal Reserve Chairman Alan Greenspan that
interest rates would not be hiked in February more than 25-basis points.

The Dow Jones Industrial Average benefited from weakness in techs, and increased by
497.66 points, or 4.43 percent, ending at 11722.98. The PHONE+ Stock Index also
powered ahead, increasing 57.59 points, or 1.25 percent to close at 4653.17.

Advancing issues overpowered declining issues 108 to 39. MGC Communications Inc. (www.mgci.com) jumped ahead after the company announced it
will change its name to Mpower Communications Corp. Part of its strategy is to make a
national name for itself in the digital subscriber line (DSL) connectivity market.

Shares of Adelphia Business Solutions (www.adelphia.com)
gained 14.94 points, or 41.14 percent. The increase was prompted after the company
announced it had entered into several agreements, totaling about $100 million, to increase
its long-haul dark fiber, metro duct and metro dark fiber networks and will connect with
its current fiber optic network.

SBC Communications Inc. (www.sbc.com) tanked after
PaineWebber analyst Eric Strumingher cut ratings of several telecom companies, including
SBC. Strumingher downgraded SBC to "attractive" from "buy," and cut
the price target to $51, from $58.

Long-distance revenues and pressures on operating margins from investments were cited.
SBC closed at $41.94 after losing 10.13 points, or 19.45 percent.

Chart: Phone+ Sevice
Provider Index