In a sign of the times, AT&T , the venerable Ma Bell, will be replaced in the S&P 500 later this week by online retailing pioneer Amazon.com
.
AT&T, for decades the steadiest stock on Wall Street, struggled in the age of telecom deregulation and the Internet, its sales marching steadily lower since the mid-1990s until it became takeover fodder for its own “Baby Bell” offspring. While no longer a separate entity, the company will remain in the S&P 500 — and rejoin the Dow — when its acquisition by SBC becomes official later this week.
Amazon, meanwhile, has used the Internet to its advantage as only a select few contemporaries have. The company reported sales of $28 million in its first quarter as a public company eight years ago; in its most recent quarter, Amazon reported net sales of $1.86 billion, a growth rate of 6,600% from July 1997. The company has been buffeted in recent quarters by analysts who would prefer greater profitability from the e-tailing pioneer, but this week’s addition of the company to the S&P 500 serves as a reminder of just how far the company has come.
Amazon rose 4.5% Tuesday on the news. The broader market, meanwhile, pulled back on a mixed wholesale inflation report and soft sales at Target .
The Nasdaq fell 14 to 2186, the S&P 500 lost 5 to 1229, and the Dow gave back 10 to 10,686. Volume rose to 2.36 billion shares on the NYSE, and 1.75 billion on the Nasdaq. Decliners led 22-10 on the NYSE, and 21-9 on the Nasdaq. Downside volume was 65% on the NYSE, and 66% on the Nasdaq. New highs-new lows were 80-214 on the NYSE, and 81-81 on the Nasdaq.
Agilent rose 5% on its results.
Red Hat and SanDisk
fell on valuation downgrades.
Intraware climbed 15% after Digital River
took a 14% stake in the company.