NEW YORK (AP) - The Nasdaq composite index fell 200 points today after published reports said the Justice Department may ask a federal judge to break Microsoft into two or three companies. Broader stock indicators were mostly lower, but financial stocks pulled the Dow Jones industrials into positive territory.
In midday trading on Wall Street, the Nasdaq composite index was down 199.93 at 3,444.49. The Dow was up 3.72 at 10,847.77, having recovered from a drop of 146 points it suffered in the opening minutes of trading.
Broader stock indicators were lower. The Standard & Poor's 500 index was down 14.04 at 1,420.50.
Microsoft, down 13 to 65 15/16, was the biggest decliner in all three indexes. The Nasdaq and the S&P 500 are weighted indexes, with the largest companies exerting the heaviest influence, so Microsoft's woes hurt those indexes more than the Dow, which values each of its 30 components equally.
News reports today said the Justice Department envisions Microsoft, as part of the penalty in its antitrust case, as being forced to split off its Windows operating system from the rest of the company.
The remainder of Microsoft possibly then would be split in two, with one company handling applications software and the other the company's Internet business, including browser software.
This week, the government will its proposed remedies this week to a federal judge in Washington who has already ruled that Microsoft engaged in illegal activity to preserve its monopoly.
``The fear of the unknown is hurting Microsoft,' said Brian G. Belski, chief investment strategist at George K. Baum & Co. in Kansas City, Mo. ``Money managers don't want to be left holding the bag if Microsoft stock has further to fall.'
Microsoft's shares also came under pressure after investment banks Goldman Sachs and SG Cowen cut their ratings on the stock. Last week, Microsoft revealed in its earnings report that revenue grew less than expected due to slowing personal computer sales.
Other technology stocks fell today. Cisco Systems fell 3 9/16 to 61 9/16 and Intel fell 2 3/8 to 113.
But blue chip financial stocks attracted some buying interest, lifting the Dow from its lows. American Express rose 4 13/16 to 147 13/16. This morning, the company reported earnings that surpassed Wall Street's expectations.
Investors continued buying into the reviving drug sector. Warner-Lambert rose 3 7/16 to 116 7/8. Merck rose 1 5/8 to 71 3/8 after reporting first-quarter profits of 63 cents per share, beating Wall Street forecasts by a penny.
Declining issues outnumbered advancers by a 3-to-2 margin on the New York Stock Exchange, where volume came to 386.21 million shares, well behind 423.55 million in the previous session.
The Russell 2000 index of smaller companies fell 13.89 to 467.95.
AP-NY-04-24-00 1219EDT |
