Palm Up on AT&T Pact - TheStreet

SUNNYVALE, Calif. (

TheStreet

) --

Palm

(PALM)

swayed in the warm market breezes Thursday as Citi lifted its sell rating and regulatory monitors offered a sunny forecast that called for the Pre to arrive at

AT&T

(T) - Get Report

in May.

Palm shares rose 3% to $9.89 in premarket trading Thursday on the uplifting news.

The move comes after a report Wednesday that showed

Verizon's

(VZ) - Get Report

torpid marketing support of the Pre and Pixi

have made for a lackluster sales debut in the past two weeks.

Palm Pre

Citi analysts upgraded Palm shares to neutral from sell Thursday. Also helping the bull case were reports that a

Pre phone was under review at the Federal Communications Commission

and scheduled to appear at AT&T on May 10.

Sprint

(S) - Get Report

and Palm introduced the first Pre phone on June 8, just hours before

Apple

(AAPL) - Get Report

unveiled its latest version of the iPhone. The Pre and its lower-priced sibling, the Pixi, have received critical praise but have failed to gain much popularity with consumers who have a host of touchscreen phones to choose from.

The spread of the iPhone and

Google's

(GOOG) - Get Report

Android devices like the

Motorola

(MOT)

Droid have helped push Palm back in line.

Palm is bleeding red and needs higher sales to turn the ship. Last year, Palm posted a net loss of $452 million on $323 million in sales. Analysts expect Palm to sell about 4 million phones this year -- if it has modest success at Verizon and AT&T.

--Reported by Scott Moritz in New York

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