By Jeffry Bartash

Early gains fizzled and most telecommunications stocks were flat to lower in Friday action, just days ahead of the inauguration of President-elect Barack Obama.

Stocks have fallen sharply over the past week amid a slew of poor corporate earnings reports, scores of layoffs and negative U.S. economic data.

The new administration plans to seek a huge stimulus plan to mitigate the effects of a steep recession, but investors are likely to remain anxious until the economy shows signs of stabilization.

In recent trades, AT&T Inc. (T), Verizon Communications Inc. (VZ) and Sprint Nextel Corp. (S) tacked lower. Sprint was down the sharpest, about 3% in value.

Several smaller stocks such as Embarq Corp. (EQ), CenturyTel Inc. (CTL) and Windstream Corp. (WIN) edged higher.

In the equipment group, Tellabs Inc. (TLAB) dropped more than 4% and Alcatel-Lucent (ALU) was down 2.5%.

Qualcomm Inc. (QCOM) was one of the few notable advancers, up 2.3% at $35.62.

The Dow Jones Wilshire Fixed Line Telecommunications Index fell 0.6% to 870 points.

The Dow Jones Wilshire Telecommunications Equipment Index dipped 0.5% to 3,731 points.

-Jeffry Bartash; 415-439-6400; AskNewswires@dowjones.com

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