Microsoft stings market
Wall Street stocks mostly higher, but
Justice action cuts tech giant
October 20, 1997: 2:22 p.m. ET
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merger - Oct, 20,
1997
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NEW YORK (CNNfn) -- Shares of Microsoft cut
into an otherwise strong U.S. stock market Monday
after the Justice Department accused the software
giant of violating a 1995 antitrust agreement.
Microsoft shares, which had climbed to 135-1/4
in anticipation of quarterly earnings due out at the
closing bell, were off 2-1/2 to 129-3/4 at 2 p.m. as
investors scrambled to sell shares. The stock
weakened when government attorneys announced
that Microsoft had unfairly attempted to force
computer makers to license and distribute its Web
browser.
As Microsoft retreated, it cut into gains reached
earlier by the Nasdaq Composite. The
technology-laden measure remained up 11.12 points
to 1,677.97, retracing some of the 72-point plunge
posted last week amid concerns of a lackluster fourth
quarter. Gainers included Dell Computer (DELL),
up 1-5/8 to 96-1/2, and Xilinx (XLNX), 1-5/8
higher at 38. Microsoft rival Netscape
Communications (NSCP) soared 5-7/8 to
40-13/16.
Other market gauges also moved higher. The
Dow Jones industrial average rose 33.89 to
7,880.92 while the S&P 500 index rose 4.20 to
948.36. On the broader market, New York Stock
Exchange advances led declines, 1,657 to 1,110, as
more than 311.8 million shares changed hands.
"We've seen [the Dow] come up towards highs in
the low 8,000s twice and head back," said Todd
Eberhard at Eberhard Investment Associates. "I think
the Dow's going to play that for awhile."
Analysts said that in addition to Microsoft the
market would focus on earnings from IBM due out
later in the day. How those companies performed for
the third quarter could direct the stock market
through the remainder of the year.
"I think we're going to be looking to the bluest of
the blue chips," said Robert Froehlich, strategist at
Zurich Kemper Investments. "This is going to be an
important week for the stock market, and I think
most of the surprises are going to be on the high
side."
In the stock market, after months of rebuffing
takeover advances from Hilton Hotels, ITT said it
agreed to be acquired by Starwood Lodging Trust
for $13.3 billion in stock and debt. The deal to
create the world's largest hotel company values ITT
at $82 a share. Shares of ITT (ITT) gained 5-3/8 to
75-3/4, while Starwood (HOT) rose 1/2 to 57.
Hilton (HLT) edged up 5/16 to 32-3/4.
Shares of Seagram (VO) climbed 2-1/2 to
34-15/16 after the company agreed to merge its
television assets into those of HSN, parent of the
Home Shopping Network. Universal will receive
$1.2 billion in cash in addition to a 45 percent stake
in the venture. HSN (HSNI) surged 3-1/2 to 42-1/8.
AT&T (T) rose 2 to 47-3/16. The long-distance
giant named C. Michael Armstrong, chairman of
Hughes Electronics, to be chairman and chief
executive. AT&T also reported a quarterly profit of
71 cents a share, beating Wall Street estimates.
A better-than-expected 10 percent jump in
quarterly profits to 41 cents a share lifted Eli Lilly
(LLY) 15/16 to 63-11/16. And Ben & Jerry's
Homemade (BJICA) gained 1-7/16 to 15-11/16
after the Wall Street Journal reported the ice cream
maker will announce that quarterly earnings rose 29
percent.
Intuit (INTU) also added 3-3/4 to 33-7/8. BT
Alex.Brown upgraded the maker of the popular
financial software to "strong buy" from "buy."
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