Mister Softee is melting.
After a less-than-flattering write-up in
, the Redmond, Wash.-based software empire took another blow, this time courtesy of
analyst Rick Sherlund. In a terse report, Sherlund said
would likely push back the release of its Windows 98 operating system to May from February. That could only be seen as an unhappy development, especially given the all the hoopla that swirled around the release of Windows 95, which transmogrified from a simple software launch into a global three-ring cyber circus.
"We were all expecting it
Windows 98 to come earlier," says one trader, who watched Microsoft crash more than five points at around one o'clock when the Goldman report hit news services everywhere. "And coming on a day like today."
Microsoft slid 7 1/4 to 130 11/16. It dragged just about every other tech share -- and the tech-gorged
-- lower. The Nasdaq finished the day 14.40 lower at 1634.90. The
Dow Jones Industrial Average
, up most of the day, slid 21.83 to 7721.14. The
dipped 4.14 to 919.77. The benchmark 30-year bond was up 1/8, pushing the yield to 6.57%.
To be sure, not all was gloomy in Bill's World.
analyst Neil Herman, while noting the expected delay in the software release in an interview, says now is a perfect time to step in and buy. "We'd only expected a small amount of revenue in the third quarter from Windows 98." He also estimated three- to five-year earnings-per-share growth to be significantly higher than the 20.3% estimated earnings per share growth in fiscal 1998, he wrote in a report. That's not bad for a company that posted 53.6% EPS growth in 1997.
Still, Monday's blowout helped sink a lot of ships in the S.S. Microsoft fleet. Chipmaker
was off 2 1/8 to 92 1/16;
slid 1 1/8 to 64 5/16; drive maker
fell 5/16 to 35 1/4;
dipped 2 to 44; and
, which announces earnings results Tuesday, slipped 5/8 to 38.
International Business Machines
slipped 1 1/2 to 96 1/4. Big Blue unveiled new models and announced it's
software subsidiary would merge with
. UNSN was up 5/8 to 14 1/2.
The tech debacle wasn't limited merely to Wintel plays. The networkers, taking their lead from
, also slid. Ascend was down 2 5/8 to 32 1/2 after both
Hambrecht & Quist
cut their outlook for the company's earnings. Fallout from the actions took down the usual suspects:
fell 2 11/16 to 69 3/4;
slipped 7/16 to 19 11/16; and
was off 1 3/16 at 48 15/16.
In non-tech news:
rose 6 3/4 to 49 5/16 after
Donaldson, Lufkin & Jenrette
Deutsche Morgan Grenfell
raised their ratings on the issue. The company, which makes everything from snacks to underwear (don't dwell on that too long), said it is restructuring and may divest itself of some of its more far-flung operations.
Tobacco stocks sputtered amid concern Congress would drag its feet on the proposed $368.5 billion settlement struck earlier this year.
fell 1 7/16 to 41 3/16;
dropped 1 3/16 to 32 7/8.
fell 1 1/2 to 51 7/16 after
CS First Boston
cut its earnings outlook to $2.25 from $2.35 per share. The company has had production problems as it integrates new workers to meet demand and has difficulty securing parts.
rose 1 to 45 13/16 after
upgraded the issue.
American Home Products
after the company voluntarily withdrew weight-loss medication from the market. The company, which estimates the recall could trim 10 cents a share from earnings in 1998, fell 3 11/16 to 73 1/4.
fell 13/16 to 39 1/4 after it announced it would buy
unit. The company's debt was also downgraded by both
King World Productions
rose 1 7/16 to 40 3/4 after talk show queen Oprah Winfrey agreed to two more years of her popular TV chat program.
to slump Tuesday. The film maker warned after the bell that sales and earnings for the third quarter would be lower. EK fell 4 to 61 1/2.