AT&T's Spending Should Ramp After Failed Merger Attempt; Equipment Makers to Benefit (JNPR) (ALU) (ADTN)

Shares of Juniper Networks and other communication equipment makers are getting a boost Tuesday morning following news Monday evening AT&T (NYSE: T) has ended talks to acquire T-Mobile USA.

In a research note earlier, Jefferies' George Notter suggested the failed merger between AT&T and T-Mobile is "great" for equipment vendors which do business with AT&T. The analyst believes AT&T reduced spending during the last quarter in order to concentrate on the proposed merger and the burdening regulatory issues which go hand in hand. The removal of the merger news might push AT&T to ramp spending in order to "catch up for lost time," according to Notter. The analyst sees AT&T becoming 'fairly aggressive' with spending during the first half of next year.

Around the sector:

• Juniper (Nasdaq: JNPR) up 10.7 percent
  
• Alcatel-Lucent (NYSE: ALU) up 13 percent
  
• ADTRAN (Nasdaq: ADTN) up 8.1 percent
  
• CIENA (Nasdaq: CIEN) up 7.8 percent
  
• Tellabs (Nasdaq: TLAB) up 1.4 percent

Most of these equipment vendors are trading close to 52-week lows and in some cases there is/was significant short interest.

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