Shares of telecommunications companies rose, but not by as much as the broad market, as traders rotated into less rate-sensitive, cyclical sectors.
One strategist said telecoms had fallen out of favor in recent weeks because of legislative rumblings about enshrining "net neutrality" concepts into U.S. law. "Late last year [telecoms] rallied about 12%-to-14% as a sector largely as a consequence of net neutrality being repealed they're certainly a decent probability that repeal will be overturned by Congress," said Oliver Pursche, chief investment strategist for broker dealer Bruderman Brothers. "I think they're a couple of votes shy of being able to pass legislation that essentially makes net neutrality law."
One brokerage said fears that streaming services would badly damage cable operators' businesses now seem overblown. "We expect cable to add about 1 million-plus mobile customers in 2018" through "virtual-network" deals, said analysts at brokerage Morgan Stanley, in a research note. Further, the Morgan Stanley analysts said, tax reform is "not priced in" to some cable companies that invest in infrastructure. "U.S.-based network infrastructure companies operating in markets with high barriers to entry should be able to retain the vast majority of their significant tax savings over time," said the Morgan Stanley analysts.
Dish Network fell after the Morgan Stanley analysts cut their rating on the satellite-television concern.
Verizon Communications struck a wide-ranging agreement with the National Basketball Association that extends the telecommunications company's relationship with the league.
Rob Curran, email@example.com
(END) Dow Jones Newswires
January 17, 2018 17:33 ET (22:33 GMT)