Verizon, AT&T Shares Fall To Lead Telecom Sector Lower

The telecom sector was the weakest of the S&P 500's 10 sectors on Monday, as investors expressed concern over rising costs and increasing competition. Citigroup analyst Michael Rollins said overall costs for new wireless spectrum auctioned off by the Federal Communications Commission is running about 36% above his estimates, at the same time price competition for services is heating up. The S&P 500 Telecommunications Services index was down 1.6%. Among the more-active telecom stocks, Verizon Communications' fell 1.6% after Rollins downgraded it to neutral from buy, and cut his price target to $51 from $53, saying he now expects 2015 earnings to fall short of expectations on higher costs and slower revenue growth. Elsewhere, AT&T's stock lost 1.8%. Morgan Stanley's Simon Flannery raised his spectrum-spend estimates for Verizon and AT&T to $15 billion each from $6 billion each. Elsewhere, shares of Sprint shed 1.2%, of T-Mobile U.S. rose 0.8% and of Frontier Communications dropped 2.5%.