Updated from 3:09 p.m. EDT

Shares of

Sprint Nextel

(S) - Get Report

surged Tuesday on reports

SK Telecom

(SKM) - Get Report

would form a strategic partnership that would aid the struggling wireless provider's recovery.

The

Wall Street Journal

said that South Korea-based SK Telecom was discussing a venture with Sprint to develop new handsets that will function on both providers' CDMA network, according to sources close to the matter.

That news contradicted an earlier report from

CNBC

, which said SK Telecom was in talks to purchase Sprint. The

Journal

article said both companies have discussed the idea of SK Telecom making a minority investment in Sprint, but they aren't pursuing an outright merger.

Late last year, Sprint spurned a $5 billion investment from SK Telecom and Providence Equity Partners. At that time, shares of Sprint traded just south of $20. Since then, they have lost more than 50% as the wireless provider has dealt with high customer losses to rivals

Verizon

(VZ) - Get Report

and

AT&T

(T) - Get Report

.

Sprint representative James Fisher told

TheStreet.com

that it was company policy not to comment on rumors or speculation. Shares of Sprint jumped 9.4% to close at $9.04, after having traded as low as $7.86 earlier in the session. SK Telecom ended down 2.5% to $20.57.

Among other wireless providers, Verizon rose 0.5%, and AT&T dropped 1.3%.

Deutsche Telekom

( DT), which operates T-Mobile in the U.S. and was once considered to be a bidder for Sprint, was off 1.1%.