Sector Spotlight: Banks Wince at Looming Telecom Debt Worries

Trouble ahead ... trouble behind....

Banks could well be singing those familiar Grateful Dead lyrics when they take stock of their telecom debt nowadays. Soaring spending and tumbling stock prices have many telcos humming the blues as access to capital markets grows scarce. And banks already struggling with problem loans could soon be facing even more losses from the troubled sector.

"It's a massively troubled industry," says Nancy Bush, analyst at Ryan Beck. "Of course, everyone is buzzing about Lucent (LU Quote)," she says, referring to the telecom-equipment provider's high-profile woes. ...