BellSouth Stands Alone

The wedding bells that rang for MCI and Verizon on Valentine’s Day threaten to leave BellSouth on the outside looking in.

With SBC snapping up AT&T and Verizon bulking up with MCI, BellSouth could find itself in a tougher competitive position, and the company has so far expressed no interest in joining the merger mania that has also seen Sprint and Nextel head down the aisle together.

Concerned about BellSouth’s “precarious position,” Standard & Poor’s downgraded the company’s shares to “sell” on Monday.

While fellow Baby Bells Verizon and SBC are each acquiring telcos “with national network capabilities and sizable enterprise customer bases, BellSouth remains focused on growing through consumer-oriented wireless and broadband offerings,” S&P said. “We believe that these planned transactions leave BellSouth in a precarious position as a stand-alone entity.”

BellSouth, for its part, remains unconcerned, telling the Associated Press on Monday that “We very much like where we are. We like our exposure on the wireless and broadband side, and that’s our focus.”

Still, after today, BellSouth appears to be at a competitive disadvantage compared to its siblings. Don’t rule out a move by the company just yet.

The broader market treaded water ahead of Capitol Hill testimony later this week by Fed Chairman Alan Greenspan.

The Nasdaq climbed 6 to 2082, the S&P 500 added 1 to 1206, and the Dow slipped 4 to 10,791. Volume declined to 1.29 billion shares on the NYSE, and 1.65 billion on the Nasdaq. Advancers led 18-14 on the NYSE, and while decliners led by a few shares on the Nasdaq. Upside volume was 55% on the NYSE, and 63% on the Nasdaq. New highs-new lows were 293-10 on the NYSE, and 131-33 on the Nasdaq.

After the close, Agilent warned.

During the day, Google managed a 3% gain despite 176.8 million shares becoming eligible for sale by insiders.

Applied Materials was unchanged ahead of its quarterly report on Tuesday, while HP fell 2.5% ahead of its earnings on Wednesday.

Network Appliance rose 4.5% on an upgrade. The company reports its results after the close on Tuesday.

Apple jumped 4% on a UBS upgrade.

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