Nextel Stock Continues Slide After ‘Sell’ Rating

Shares of wireless communications giant Nextel Communications continued to slide Tuesday after a rare Wall Street “sell” rating on the stock.

Nextel shares fell 49 cents to $7.87 on Nasdaq after diving $1.64 on Monday, when Lehman Bros. analyst John Bensche cut his rating on Nextel to “sell” from “market perform,” citing a “challenging” near-term outlook for the industry.

The share price is nearing the four-year closing low of $7.17 reached on Oct. 2. The stock had rallied as high as $12.25 in early December.

Another analyst, Jennifer Fritzsche at Wachovia Securities, cut her rating on the wireless sector to “neutral” on Monday.

“In an effort to gain market share, we believe many carriers will lose their pricing power,” she said.

Last week, Verizon Communications’ wireless unit said it added fewer-than-expected new subscribers in the fourth quarter, amid the struggling economy.

Also, Western Wireless said it added 19,000 subscribers in the quarter, which Douglas Makin, analyst at Kaufman Bros., described as a “disaster.” Western Wireless shares, which traded for $28 at the start of the year, have plummeted. They closed Tuesday at $17.41, down 59 cents on Nasdaq.

Some analysts say the slowdown in the industry probably will lead to more consolidation.

Among other wireless stocks, AT&T; Wireless inched up 33 cents to $11.79, and Sprint PCS fell 64 cents to $17.32, both on the New York Stock Exchange.