Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



AT&T Stock Is Holding Back the Dow

The Dow Jones Industrial Average (DJINDICES: ^DJI  ) is basically flat after slightly better than expected unemployment claims data. AT&T (NYSE: T  ) stock is holding back the Dow, though, after a hedge fund manager said that investors should be wary of the stock. As of 1:15 p.m. EDT, the Dow was up 20 points to 15,125. The S&P 500 (SNPINDEX: ^GSPC  ) was down two points to 1,630.

There was one U.S. economic release today.





Weekly new unemployment claims




Source: MarketWatch U.S. Economic Calendar.

Weekly new unemployment claims fell 4,000 from last week to hit their lowest level since 2008. Analysts had expected a slight rise to 335,000. The drop brings the less volatile four-week moving average down 6,250 to 336,750 -- the lowest level since 2007 and 30,000 less than last year's average of 360,000-370,000. Fewer unemployment claims signals a strengthening job market, which is welcome news as recent data have shown the economy slowing.

Despite the good news, the market is down today as numerous stocks are down. Leading the way down is AT&T, down 1.30% to $37.34 after it was negatively talked about at the Ira Sohn Conference, which is an event for charity where investors donate to attend to hear notable investors present investment ideas. After the market closed yesterday, Jonathan Jacobson of Highfields Capital Management presented. Highfields is a "value-oriented investment management firm which manages private investment funds" for institutional investors; the firm has over $11 billion in assets under management. Jacobson pitched a short idea, Digital Realty Trust, which is down 5% today. This was his first short idea presentation since he pitched that investors short Enron.

Jacobson also noted that investors are stretching for yield and overpaying for high-yield dividend stocks. This can be seen as yesterday the Barclays U.S. Corporate High Yield index fell to a low 4.96%. He told investors that not all dividends are the same and to be wary of AT&T. He warned that the company's wireline business is a "melting ice cube" and that the wireless business is becoming more competitive.

AT&T stock has struggling a bit, up 10% this year versus a 15% gain for the Dow. In its wireless segment, the company is facing tough competition from a variety of players. The tough competition showed in AT&T's results this past quarter. AT&T lost 69,000 subscribers and missed on revenue expectations, which fell 1%. Verizon (NYSE: VZ  ) , through Verizon Wireless, has been taking market share and wants to use its good results to buy out Vodafone's 45% stake in Verizon Wireless. T-Mobile USA also appears to be getting stronger as it tries to merge with MetroPCS and tries out a new pricing strategy that it hopes will help it take market share. New entrants also appear to be trying to get into the wireless game with DISH Network and Softbank bidding for Sprint (NYSE: S  ) .

If you're on the lookout for high-yielding stocks, The Motley Fool has compiled a special free report outlining our nine top dependable dividend-paying stocks. It's called "Secure Your Future With 9 Rock-Solid Dividend Stocks." You can access your copy today at no cost! Just click here.

Read/Post Comments (0) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2420369, ~/Articles/ArticleHandler.aspx, 9/26/2016 3:16:01 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 2 days ago Sponsored by:
DOW 18,261.45 -131.01 -0.71%
S&P 500 2,164.69 -12.49 -0.57%
NASD 5,305.75 -33.78 -0.63%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/23/2016 4:00 PM
T $41.28 Up +0.17 +0.41%
AT and T CAPS Rating: ****
^DJI $18261.45 Down -131.01 -0.71%
^GSPC $2164.69 Down -12.49 -0.57%
S&P 500 INDEX CAPS Rating: No stars
S $6.64 Up +0.02 +0.30%
Sprint CAPS Rating: **
VZ $52.56 Up +0.21 +0.40%
Verizon Communicat… CAPS Rating: ****