September swoons

Welcome to the blood-letting month. September historically has been the worst month for the stock market, and based on the results from the month’s first day of trading, Wall Street welcomed investors back from the long holiday weekend with a swift kick to the chops.

For the telecom market specifically, some of the industry’s bellwether issues (pun intended) were being blamed for Tuesday’s drop, which was the steepest since trading began after the Sept. 11 terrorist attacks.

But take a step back for a moment and a clearer picture emerges. True, three of the four Bell operating companies are finally taking their lumps after escaping much of the market carnage. However, most of the “leading indicators” for our sector have already been beaten down so badly they’re already trading at historic lows. Lucent, the stock most of the market watches as an indicator of telecom equipment vendor health, has been trading below $2 and currently has a market capitalization of just over $6 billion. At that level, the precipitous drops in broader market averages don’t always come into play.

On a day when the Dow dropped more than 350 points or 4.1%, the North American Telecom Index, which tracks the largest carriers and vendors, fell just a few points off its already embarrassingly low level. Lucent even traded up a few pennies.

So while September traditionally has been the bears’ month, this year may require more perspective than previous runs through the blood-letting month.