Telecom Stocks Plunge on Failed Bailout Vote

Telecom-related stocks plummeted Monday after the $700-billion rescue bill was voted down by the House of Representatives.

The $700 billion proposal championed by Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke failed to garner sufficient votes to make it through the House. The package, which would have set up a facility to use government money to buy troubled assets from financial firms, was voted down with an initial tally of 206 votes supporting the bill, and 227 against.

Without a bailout, fear swept over Wall Street that financial markets would seize, affecting any company that depends on banks to keep floating money. Investors quickly fled from equities to the so-called safe haven of credit markets, sending shares lower.

U.S. wireless carriers were hit hardest by word the bailout was defeated. Sprint Nextel (S Quote - Cramer on S - Stock Picks) dropped 10%, AT&T (T Quote - Cramer on T - Stock Picks) gave back 5.6% and Verizon (VZ Quote - Cramer on VZ - Stock Picks) fell nearly 3%. Deutsche Telekom (DT Quote - Cramer on DT - Stock Picks), meanwhile, fell 8.4%.

Network equipment makers also saw shares slide dramatically. Cisco Systems (CSCO Quote - Cramer on CSCO - Stock Picks) tumbled 7.2%, Alcatel-Lucent (ALU Quote - Cramer on ALU - Stock Picks) slid 16.2%, Juniper Networks (JNPR Quote - Cramer on JNPR - Stock Picks) was off 7.3% and Nortel Networks (NT Quote - Cramer on NT - Stock Picks) lost 9.8%.

Among handset makers, Nokia (NOK Quote - Cramer on NOK - Stock Picks) slipped 9.7%, Ericsson (ERIC Quote - Cramer on ERIC - Stock Picks) lost 9.4% and Motorola (MOT Quote - Cramer on MOT - Stock Picks) was falling 9.2%.

Cable and satellite operators were also hit hard. Comcast (CMCSA Quote - Cramer on CMCSA - Stock Picks) slid 9.8%, Cablevision (CVC Quote - Cramer on CVC - Stock Picks) dropped 8%, Dish Network (DISH Quote - Cramer on DISH - Stock Picks) was down 17% and Sirius XM (SIRI Quote - Cramer on SIRI - Stock Picks) gave back 7.9% to 70 cents.