Tech Stocks Lackluster Though Prospects Appear Bright

Post-Rally exhaustion, Microsoft uncertainty and sluggish Dow make for a slow Monday.
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Today was a day that made a good argument for a three-day weekend.

Technology stocks, including Internet issues, experienced a lackluster session that, despite starting on a positive note, dragged modestly lower by day's end.

TheStreet.com Internet Sector

index closed down 11.56, or 0.9%, at 1260.97, though it traded as high as 1290.26 early in the session.

TheStreet.com New Tech 30 closed down 8.46, or 1.0%, at 817.45. Losses in the

Dow

may have contributed to some selling in tech shares, though the sector was likely in need of a breather after rallying for much of last week. Softness in

Microsoft

(MSFT) - Get Report

as it continues to

negotiate with the government also contributed to the uneventful trade.

Can people lighten up on our own

James Cramer

for

suggesting that maybe people should take some money off the table? Since when was making a profit a crime?

Nonetheless, the Internet sector is in a relatively positive mindset. Upcoming earnings should be good, and until the

Federal Reserve

gets serious about cooling off the stock market (check out

Alan Abelson's

column in

Barron's

), there don't appear to be many negatives on the horizon. In general, lack of news today kept interest in the market relatively quiet.

Merger Talk Bouys Stocks

There were a couple of mergers in the sector that moved the principals.

Spyglass

(SPYG) - Get Report

closed up 12 1/2, or 18%, at 82 3/8, though it traded as high as 95 1/4 on news that the Web software company would be bought by

OpenTV

(OPTV)

in an all-stock transaction. OpenTV closed down 39 15/16, or 25%, at 129 1/16.

Under terms of the deal, Spyglass shareholders will receive 0.7236 OpenTV Series shares in exchange for each share of Spyglass stock they own. Based on OpenTV's closing stock price on March 24, the deal valued Spyglass at $122.28 a share.

Also,

Talk.com

(TALK)

ended up 2 13/16, or 19%, at 17 3/8 after it said it was buying

Access One Communications

, a privately held local telecommunications service provider to nine states in the Southeast for $200 million in stock. Separately, Talk.com said it reached a deal with

Soros Private Equity Partners

to invest $80 million in the company in exchange for 80,000 shares of 7% convertible preferred Talk.com stock.

Finally,

Red Hat

(RHAT)

closed down 3 7/8, or 6%, at 56 5/8 after reporting

earnings this morning. Red Hat posted a fourth-quarter loss of 4 cents a share, a penny narrower than the four-analyst estimate, but wider than the year-ago loss of 3 cents a share. The stock rallied on Friday in advance of today's reports, so traders were likely selling after the fact.