Alcatel-Lucent Gets Big Deal

Alcatel-Lucent(ALU),the Franco-American telecom giant,has landed a huge contract with Verizon Communications.It is a three year,six billion dollar network expansion and improvement deal.ALU offers an encyclopedic array of products and services worldwide,but its stock has been pummeled because of a low earnings forecast on account of merger costs.Late last year,the Paris-based Alcatel completed its merger with Lucent Technologies,the former Western Electric component of the old Bell System.Alcatel-Lucent is headed by American CEO Patricia Russo.

More Testing Ahead

There seems to be a consensus on Wall Street that the correction will go on.Just how long it will is unclear.Andrew Siebart of Stewart Capital feels the rest of the year will be choppy.Sarat Sethi of Douglas C. Lane thinks the volatility will continue for a few more months.According to Steve Hochberg of Elliot Wave,we have gone from a rally phase to a declining phase,a sea change in the market.There was a rally yesterday,but the volume was thin.The market is still weak,and those who have been shaken need a lot more firmness before they will come back.

Correction Question

Is the stock market correction over,or will another shoe drop? There are analysts on both sides of the issue.It has only been two weeks since the precipitous decline,however,so it does seem to be premature to be declaring victory.As Mark Arbeter of Standard and Poors noted yesterday,trading volume during the partial recovery has been light,casting doubt on its authenticity;nor have there been any shocks to put the market to the test.If a surprising piece of significant data is weathered,then we might breathe easier.Until then,many investors are holding back in bonds and cash.

Bond Funds Beckon

A number of bond funds are available to investors at this time of crisis.They include the iShares Lehman Brothers TIP,TLH,SHY,TLT,IEI,IEF and AGG funds.Black Rock offers the BFK and BNA funds.One option is to put new money in these funds,while holding on to good equity positions.It could be weeks or even months before the market regains its composure.In the meantime,bond funds provide some stability and income to beleaguered holdings.