Thursday's Market: Microsoft Ruling Adds Fuel to Fed Rally

(Updated from 4:34 p.m. EDT)

Investors tipped their hats to a court decision that overturned the Microsoft (MSFT Quote) breakup ruling today and assented to a 25 basis-point reduction in short-term interest rates yesterday.

The major indices rose sharply today, but finished off their highest levels of the session. The Dow Jones Industrial Average closed up 131.37 points, or 1.3%, to 10566.21, while the Nasdaq Composite ended ahead 50.7 points, or 2.4%, to 2125.4. The broad S&P 500 Index finished higher by 15.13 points, or 1.3%, to 1226.20.

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Just after 11:30 a.m. EDT, the U.S. Court of Appeals for the District of Columbia set aside a lower court's decision to break up Microsoft (MSFT Quote) as a remedy in the government's antitrust case against the software giant. Trading of Microsoft shares was halted until 2:50 p.m. EDT. They closed up 2.3% to $72.74, below where they were trading before the legal decision. ...