The Dow Jones Industrial Average (DJINDICES:^DJI) was rallying early on Friday, up 23 points as of 11:32 a.m. EST. Telecom stocks, however, were broadly lower. Dow components AT&T (NYSE:T) and Verizon Communications (NYSE:VZ) were down just slightly, while Sprint (NYSE:S) and T-Mobile (NASDAQ:TMUS) shares experienced notable declines.

Bernanke set to give speech
There were few economic releases early on Friday, as traders may have been bidding up stocks ahead of this afternoon. Departing Federal Reserve Chairman Ben Bernanke is set to address the American Economic Association in Philadelphia at 2:30 p.m. EST. It's possible that Bernanke could make some remarks that would support further Fed action toward stimulating the U.S. economy. If he does, stocks could continue their rally late into the afternoon.

AT&T goes to war with T-Mobile
But telecom stocks were not participating in the rally. The move lower in shares of AT&T, Verizon, and T-Mobile may have been sparked by AT&T's announcement today that T-Mobile customers can get $450 in AT&T credit for switching networks.

T-Mobile made waves in 2013 with a series of radical announcements that it collectively called its "un-carrier" strategy. By doing away with subsidies and dumping two-year contracts (among other things), T-Mobile has become the nation's fastest growing wireless carrier. Given that both are GSM carriers, it's possible that many of T-Mobile' new subscribers are former AT&T customers -- bringing an AT&T phone over T-Mobile can be as easy as switching out a SIM card. AT&T's announcement on Friday may have been an aggressive move to bring some wayward customers back.

AT&T's initiative has the potential to draw millions of subscribers from T-Mobile. It suggests that the wireless industry in general is becoming much more competitive, weighing on the business prospects of all companies involved. Verizon, for example, could be forced to offer similar incentives in the future, which might be why investors sold Verizon shares Friday morning.

Sprint hit by downgrade
Sprint, as one of the nation's largest wireless carriers, also stands to lose, but Friday was particularly bad for the company for other reasons. Analysts at Stifel Nicolaus downgraded Sprint stock to sell. Sprint shares are up an astounding 80% in just the last year. On Friday, however, they fell about 4.4%, back into the single-digits. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.