Microsoft's Woes Depress the Dow

SAN FRANCISCO (03/27/2000) - Microsoft Corp. led the Dow Jones Industrial Average on a downhill ride today. The Dow dropped 86.87 points, or 0.78 percent, to 11,025.85 as it became clear that the federal government would reject the company's settlement offer in its antitrust lawsuit. Uncertainty over the tech behemoth's future led Microsoft to close the day down US$7.63, or 6.83 percent, at $104.06.

The drop affected the Nasdaq as well. Though the index stayed afloat through the day, buoyed by gains in Cisco Systems Inc. (up 69 cents to $80.06), Intel Corp. (up $3.63 to $142.69) and Qualcomm Inc. (up $2.94 to $148.94), the tech-rich indicator couldn't retain its gains, and finally dropped 4.47 points, or 0.09 percent, to close at 4,958.56.

The financial sector suffered a small beating as well, with JP Morgan falling $5.69 to $131.13, American Express Co. losing $5.13 to close at $150.50, and Citigroup falling half a point to close at $60.06 -- none of which helped the Dow.

What happens next is anyone's guess. Indeed, Microsoft's drop follows a near 15 percent rise in the company's stock price just last week. Today's hard-hit financials were otherwise nicely up this month, causing the declines to come as a surprise. Analysts suspected some profit-taking, but were hard-pressed to explain the dips.

"Long-term trends are hard to call at this point, because there aren't any," said Jeffrey Warantz, an equity strategist at Salomon Smith Barney. "There's so much volatility. There are rapid turnarounds, or Greenspan says something, or some company releases bad numbers. It's not just volatility in the market; it's a volatility in sentiment that we're seeing. There's not a lot of firm conviction anywhere, one way or the other, about what the market is doing."

Indeed, it's been awhile since we've heard the traditional bull-vs.-bear debate; there are few ideas on which way the market will go, and disparities in the indices only add to the uncertain outlook. If there are any predictions to be made about the market, it's strictly on a sector-by-sector basis. And even then, only one sector continues to survive scrutiny and inspire hope: the beloved tech.

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