Financial Markets and the AT&T Antitrust Settlement

The 1984 Justice Department settlement with AT&T marked one of the largest antitrust action in the nation's history. At the end of the process major changes were made in the original settlement proposal. Investors in affected industries behaved as if they were assessing these changes. Portfolio values of AT&T, its direct competitors, and firms in fields AT&T would enter were affected. As the settlement was made final, financial markets evidence indicates changes in abnormal returns for affected firms.