Brian.oco 0 Posting Whiz

This week doesn’t bode well for the overall stock market, even though the Dow Jones was up 300 points on Friday, and even though tech stocks have held up well over the past few weeks in a volatile traading environment.

My chief concern is the Russia military action in Georgia. This weekend, the Russians went after a key oil pipeline that delivers oil to the west. According to wire service reports on the ground in Georgia, damage was significant.

That’s the last thing the energy markets needed, and by extension, the stock market. If the damage to the pipeline is severe, then look for oil prices to rise, perhaps significantly. That would put a damaging crimp in the progress made in the oil market the last few weeks.

On the tech front, some big news may be brewing at Sprint Nextel, which is mulling over a sale of its Nextel wireless division. There’s a lot to look at here but perhaps the significant one is that Sprint only purchased Nextel in 2005. The value of that purchase is up for debate – analyst say that the $35 billion paid for Nextel has been slashed, value-wise, to a value of about $5 billion today. That’s an 80% loss in only three years.

The economy hasn’t helped in that regard, but Sprint can point the icy finger of guilt its own way. As Reuters reports on Sunday, technical service issues have triggered a flood of customers heading to the exits.

“Sprint has struggled to integrate Nextel's iDen network, used by public safety and construction workers, with its own services and has lost millions of customers since paying about $35 billion for Nextel Communications three years ago."

Any buyer would find it tough to reverse the now-completed integration of the iDen business, including its billing, broadcast towers and customer service, analysts say. About 14.6 million subscribers, or 28 percent of Sprint's total 51.9 million customers, were exclusively using the iDen network at the end of the second quarter, Reuters adds. So the obvious candidate for a buyout would be a telecom company that already uses iDen – and a company like Nii Holdings, based in Latin America, could step up to the plate.

We’ll see about that, but one thing we do know is that Wall Street likes the idea of Sprint ridding itself of Nextel. Sprint’s stock rose almost 8% after rumors started circulating about the Nextel purge, although some of that boost might be attributed to the cancellation of a convertible stock sale by Sprint that was opposed by many stockholders.

Sprint is $23 billion in debt. It doesn't need or want Nextel. Getting rid of Nextel for a quarter on the dollar may hurt, but it might be the best that Sprint can do.