Dow Jones 8,580.21 +124.06  1:05 pm EST, Thurs., August 8, 2002  NASDAQ 1,298.10 +17.20  For info, visit access.smallcapnetwork.com .  S & P 500 893.92 +17.15  To be removed, please click here .  Russell 2000   384.41 +0.94  VOLUME 02: ISSUE 54 Trading Alert: Lightening Strikes Twice It looks like Covad Communications (COVD) may have another deal in the works with a major telecom company.  We initially issued a trading alert on Covad in our July 24th edition at $1.01 per share based on rumors of a deal with Sprint (FON).  Our target for the trading alert was $1.30 per share which represented a nice 29% return.  In less than three trading days the stock hit $1.41 per share when the deal with Sprint was publicly announced. The rumor proved to be true and our readers were the beneficiaries.  The rumor now is that AT&T (T) is close to inking a deal with Covad to provide residential DSL service.  The stock is currently trading at $1.17 per share with less than normal volume.  The company is reporting earnings today after close and it is possible that the AT&T rumor becomes fact.  However, since it is earnings day there is a strong possibility that the stock gaps open tomorrow on good news after close.  There is also a chance of Covad gapping down if bad news is announced. For readers that benefited from the initial trading alert.  The risk to reward ratio at $1.17 per share is not too bad.  A positive earnings announcement coupled with an AT&T deal should send the stock to the $1.40 per share range.  This is a gain of approximately 20% while the downside risk is around the $1.05 range. This is a highly speculative trading alert because Covad is reporting earnings and because until something is formally announced a rumor is just that.  Will lightening strike twice with this company?  We shall know shortly after close. The following press release is said to be a hint to the deal:     Thursday August 1, 10:01 am Eastern Time Press Release SOURCE: AT&T Broadband AT&T Broadband Offers New Faster Speed to Cable Internet Users; Company Plans to Trial Lower Speed Service Later in the Year ENGLEWOOD, Colo., Aug. 1 /PRNewswire/ -- Internet power users who have a need for more cable Internet speed now can subscribe to UltraLink service, a new level of AT&T Broadband Internet, the company announced today. The faster broadband Internet residential service is being launched today in Dallas, Denver, Salt Lake City, San Francisco Bay Area, Seattle, St. Paul and communities in the company's Michigan and Rocky Mountain markets. The UltraLink service is a faster cable Internet speed that will be offered in addition to the company's current service. The new tier will allow customers to surf at maximum speeds* capped at 3 Mbps downstream and 384 kbps upstream for $79.99 per month. The service costs $82.99 per month for customers who lease a modem from the company. "Consumers enjoy the power of a lightning fast, constant connection provided by high-speed cable Internet," said Karl Ossentjuk, vice president of Internet services at AT&T Broadband. "Now, we can give them more of what they love with the faster UltraLink service. It serves the higher bandwidth needs of consumers who have set up home networks, send or receive large files such as when downloading software or enjoy other bandwidth-intensive applications." The company expects to launch the service in other markets later this summer. These markets include: Atlanta, Florida, Pittsburgh, Portland, Richmond and Southern California. Chicago, Central California and the Northeast markets will launch the UltraLink level of service later this year after the company completes various ongoing system upgrades that are a prerequisite to offering ISP choice, standard upstream speeds and tiered Internet speeds in addition to other enhancements. Later this year, the company plans to trial a lower speed tier of AT&T Broadband Internet service geared toward consumers who are looking to upgrade from a dial-up connection and want the power of a constant broadband connection. "Our mission is to give consumers choices and flexibility for all of the broadband Internet services whether it's a faster speed, a lower speed or a choice of ISPs," said Ossentjuk. AT&T Broadband already offers AT&T Broadband Internet to nearly 1.8 million customers. That service allows customers to surf the Internet at speeds up to 1.5 Mbps downstream and 256 kbps upstream for $42.95 per month. Customers who lease modems from the company pay $45.95 per month. Actual speeds will vary. Factors that affect the speeds include: customer's computer performance and configuration; accessing non-cached or cached data; performance characteristics of each component of the data network; the number of users and overall traffic on the Internet and the data network and all users' compliance with the Acceptable Use Policy.         About AT&T Broadband AT&T Broadband, a business unit of AT&T, is the nation's largest broadband services company, providing television entertainment services to more than 13 million customers across the nation. The company also provides advanced services, such as digital cable, high-speed cable Internet services and competitive local phone service. More information on AT&T Broadband services can be found at www.attbroadband.com . AT&T (NYSE: T - News) is the world's leader in telecommunications services and technology. This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These include, but are not limited to, statements regarding the Company's plans, intentions and expectations. Such statements are inherently subject to a variety of risks and uncertainties that could cause actual results to differ materially from those projected. These risks include increased levels of competition, shortages of key equipment, restrictions on the Company's ability to finance its growth and other factors. A more extensive discussion of the risk factors that could impact these areas and the Company's overall business and financial performance can be found in the Company's reports filed with the Securities and Exchange Commission. Given these concerns, investors and analysts should not place undue reliance on forward-looking statements.  SOURCE: AT&T Broadband D I S C L A I M E R : The SmallCap Digest is an independent electronic publication committed to providing our readers with factual information on selected  publicly traded companies. SmallCap Digest is not a registered investment advisor or broker-dealer. 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