Verizon, AT&T and T-Mobile fall on SpaceX's spectrum deal

Verizon, AT&T and T-Mobile fell on Friday after SpaceX agreed to buy a nationwide block of the airwaves used for mobile phones. The S&P 500 still rose 0.6%, to 7,811.

The Dow added 0.8%, to 51,655, and the Nasdaq Composite rose 0.6%, to 27,366. Nine of State Street's 11 sector funds closed higher. State Street SPDR S&P 500 ETF ASPY, which tracks the S&P 500, traded at less than half its typical volume over the prior 20 sessions.

The spectrum deal

SpaceX, the aerospace company led by Elon Musk, announced the agreement on Thursday. It will buy the nationwide 800 megahertz portfolio from investment firm Grain Management.

The 800 megahertz band is low-band spectrum — airwaves that travel farther than higher frequencies and pass through walls, which is vital for cell phones used indoors.

On August 11, T-Mobile said it had transferred that same portfolio to Grain for $2.9 billion in cash and all of Grain's 600 megahertz licenses.

The Wall Street Journal reported on Thursday, citing unnamed people familiar with the deal, that SpaceX will pay about $8 billion in cash. The companies have not confirmed that figure. The sale still needs approval from the Federal Communications Commission.

SpaceX said the purchase, paired with its next generation of satellites, would enable its Starlink Mobile service to run from space and from the ground.

T-Mobile fell 13.3% to $148.58, and traded at its lowest price in the past year. AT&T fell 9.8% to $22.18. Verizon fell 8.7% to $41.65.

The three lost $57.6 billion of market value in the session. SpaceX, listed on the Nasdaq exchange, rose 1.2%.

The companies that own the cell towers rallied. Crown Castle rose 15.6%, American Tower rose 9.3%, and SBA Communications rose 7.3%.

Morgan Stanley said the deal could help the tower companies. Even a network built around satellites could still need towers, rooftops and other ground equipment, the analysts said, Reuters reported on Friday.

Those three tower companies are about 11% of the State Street Real Estate Select Sector SPDR ETF AXLRE. Their gains accounted for about 1.2 percentage points of the fund's 1.9% rise. That rise led State Street's 11 sector funds.

"A company can have billions of dollars of spectrum, but if they do not have the network to use it, it's just empty airwaves," Verizon spokesman Rich Young said, NBC News reported.

Morgan Stanley also called the deal a clear sign SpaceX will buy spectrum more aggressively. Any threat to the carriers, the analysts said, is likely to arrive gradually, and to show up first in rural markets.

FCC Chair Brendan Carr called competition in the spectrum market "really good news for the American consumers," CNBC reported.

AT&T, T-Mobile and Verizon together are about 13% of the State Street Communication Services Select Sector SPDR ETF AXLC. Meta and Alphabet are about 45%.

The fund fell 1.5%, the worst of the 11 sector funds. The carriers accounted for about 1.4 percentage points of that drop, nearly all of it.

Humana's Medicare ratings

Humana said 95% of members in its Medicare Advantage plans will be in plans rated four stars or higher for 2027, up from 20% for 2026. Medicare Advantage plans are private plans within Medicare, the federal health insurance program that covers older Americans and the disabled. The star ratings are the government's score for the plans, and the Centers for Medicare and Medicaid Services said the 2027 scores will affect bonus payments in 2028.

Open enrollment for the new plans begins October 15. Reuters reported that JPMorgan analysts had expected 60% to 70%.

Humana rose 11.3% to $431.03. Reuters said the shares were up 15% before the opening bell. They traded as high as $456.50, a 52-week high, but closed well below that level.

The rise in the S&P 500 was a poor summary of the day.

Three carriers lost $57.6 billion on a deal the FCC has not approved, and on a threat Morgan Stanley called gradual and rural. That looks too big to us.