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Qwest shares rise after union agreement
NEW YORK |
NEW YORK (Reuters) - Qwest Communications International Inc (Q.N) shares surged more than 19 percent after the U.S. phone company reached an agreement with its labor union over wages and health care issues and ended the possibility of a workers' strike.
Qwest and the Communications Workers of America reached a four-year tentative agreement less than two weeks after union members voted down a previous, three-year proposal, the company said in a statement over the weekend.
Qwest shares rose 42 cents, or 19.3 percent, to $2.60 in morning New York Stock Exchange trade. The stock also benefited from bullish sentiment in the overall market as the Nasdaq composite .IXIC and Dow Jones industrial average .DJI both rose more than 5 percent.
The latest agreement includes a cumulative wage increase of about 12.6 percent over the life of the contract, compared with a 9 percent rise that had been offered in the three-year agreement in August, Qwest said.
The new deal also calls for a $75-per-month contribution for family coverage and a choice of plan designs, as well as a 3 percent hike in pension for eligible individuals retiring after October 12, 2008.
The agreement, which would cover about 57 percent of Qwest employees, should be finalized by the end of the month, the company said.
"This agreement is reasonable and fair in terms of wages and holding back the towering rise in health care expenses," said Louise Caddell, vice president of CWA District 7.
(Reporting by Ritsuko Ando in New York and Savio D'Souza in Bangalore; Editing by Lisa Von Ahn)
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