Investors in the US brushed off worries about Microsoft's future yesterday, sending its shares higher and fuelling a rally in technology stocks that spread to the broad market.
The Dow Jones industrial average rose 77.87 points, or 0.7 per cent, to 10,811.78. The Nasdaq composite index rose 97.41, or 2.5 per cent, to 3,958.07.
Broader stock indicators were also higher. The Standard and Poor's 500 rose 15.82 to 1,468.25. Advancing issues outnumbered decliners by nearly a 2-to-1 margin on the New York Stock Exchange, with 1,959 up, 1,055 down and 432 unchanged.
Microsoft rose in the first session since the Justice Department asked a federal court to divide the company in two to satisfy antitrust concerns. Late on Friday afternoon, the Justice Department and 17 states recommended splitting the company into two businesses: one for Microsoft's Windows operating system software, and one for the company's applications products and Internet businesses.
The proposal was widely expected, and many investors determined that the possibility of a break-up had already taken its toll on Microsoft stock. Before yesterday's session, Microsoft's share price had declined by about 40 per cent since the star of the year but rose yesterday by $35/8 to $733/8. The US software company took full-page advertisements in most of the large American daily newspapers protesting against the Justice Department's recommendation.
Most market watchers expect the Federal Reserve to raise interest rates for the sixth time in a year when it holds its next meeting on May 16th. The indication of modest growth raised hopes that only a modest, quarter-point increase is likely.
