Moody's said Verizon ought to [reduce] its use of short-term debt ... S&P cut its rating on the debt of KPNQwest, the European affiliate of Qwest ... phone stocks declined ... Nortel dropped 6.3 percent ... the company is in talks with Motorola to combine their wireless-network divisions ... Nortel may have to shed another 10,000 jobs because of anemic growth ... ... [Analysts] cutting revenue outlook for Nortel due to the "continued decline in the spending outlook for large wireline and wireless operators globally" ... the hopes for a rebound in the second half have "clearly fizzled out." ... Nextel dropped 5.4 percent .... Elsewhere, wireless stocks fell.

Just another day in the life of the sagging telecom industry ...