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'Not Listening to Anything Negative': Market Shrugs Off Microsoft

The force of positive sentiment in the market overcame Microsoft's ultimately modest decline, sending the Nasdaq to another record.

SAN FRANCISCO --

Microsoft

(MSFT) - Get Microsoft Corporation (MSFT) Report

has the biggest market cap, but it has no monopoly on determining broader stock market trends. As Microsoft battled to overcome its early-morning woes, most other tech stocks rose in unfettered fashion, sending the

Nasdaq Composite Index

to its seventh-consecutive record close.

In the wake of Judge Penfield Thomas Jackson's harsh

findings of fact ruling Friday, shares of the software giant fell as low as 81 today, before closing off 1.8% to 89 15/16. Microsoft was a drag on the

Dow Jones Industrial Average

, which closed up 14.37, to 0.1%, to 10,718.85 after trading as high as 10,776.05 in the final hour of trading and as low as 10,646.07 early on.

IBM's

(IBM) - Get International Business Machines (IBM) Report

gain of 4.1% more than offset Microsoft's deleterious impact on the Dow.

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The Nasdaq Comp, inspired by companies perceived to benefit from the judge's comments on Microsoft and by a host of Net names, rose 41.68, or 1.3%, to a record 3143.97. The

Nasdaq 100

also set a new standard, rising 1.1% to 2786.27.

"The way

Globex

was this morning, I was surprised how little we saw to the downside," Bob Basel, director of listed trading at

Salomon Smith Barney

, said of the market's reaction to the Microsoft news. "It just tells you maybe people are treating the Microsoft thing as an individual issue and the fundamentals of other stocks isn't changed. The bigger picture is the market is OK going forward."

Beyond the musings about Microsoft, "there's nothing earth-shattering as far as the action today," Basel said. "The Nasdaq continues to set new records, but it seems to be a pretty quiet Monday."

The action certainly wasn't subdued in terms of Microsoft trading, as 121.5 million shares changed hands vs. the average daily volume of about 28 million.

"The market is remarkably quiet but a lot of people are making bets on Microsoft," said the head trader at one West Coast firm. "Guys selling probably have big profits and don't want to take any chances. Guys buying obviously think it's still a great company. But it sure doesn't look like it's changing anything" in terms of the bigger picture.

The Bad Looks Good in Tech

Tony Cecin, manager of Nasdaq trading at

U.S. Bancorp Piper Jaffray

, said today's action was not so much about Microsoft's importance, but that "the market is not listening to anything negative."

There was "enough commentary about Microsoft being better off broken up" to offset the worrisome prospect of severe government action, Cecin said. "Meanwhile, the rest of the Comp is off to the races. Just roaring. It seems anything negative is perceived a positive for many other tech stocks."

Companies winning at Microsoft's expense today included

Sun Microsystems

(SUNW) - Get Sunworks, Inc. Report

, up 1.9% and

Apple

(AAPL) - Get Apple Inc. (AAPL) Report

, higher by 9.1%; each established an all-time best. Also,

Red Hat

(RHAT)

, the largest distributor of the Linux operating system, gained 19.6%.

In

New York Stock Exchange

trading, Microsoft nemesis

America Online

(AOL)

gained 2.9%, helping lift

TheStreet.com Internet Sector

index to its third-straight record, up 26.03, or 3.2%, to 840.90. Also,

TheStreet.com

Red Hotsindex rose 5.19, or 1.8%, to 286.94. The 20-stock index tracks action in particularly volatile stocks and is meant to measure so-called hot money.

In addition to AOL, the DOT got big boosts from

RealNetworks

(RNWK) - Get RealNetworks, Inc. Report

, up 3% after relaunching its Web site, and

Amazon.com

(AMZN) - Get Amazon.com, Inc. Report

, up 20.1% ahead of an announcement regarding the further expansion of its product line.

Gains for aforementioned Net bellwethers came amid another rush of cash into various Net and related names such as

Beyond.com

(BYND) - Get Beyond Meat, Inc. Report

, up 28.5%,

E.piphany

(EPNY)

, higher by 50.2%, and

Phone.com

(PHCM)

, which closed up 5.7% to 284 15/16 after trading as high as 294 3/4.

With no boost from smaller Net names, the

S&P 500

struggled before closing up 6.78, or 0.5%, to 1377.01. In addition to weakness in Microsoft and other tech giants such as

Dell

(DELL) - Get Dell Technologies Inc Class C Report

and

Motorola

(MOT)

, the index was hampered by a setback for financials.

American Express

(AXP) - Get American Express Company Report

, for example, dipped 1.9% and overtook Microsoft as the Dow's biggest negative influence.

Additionally,

Providian Financial

(PVN)

dumped 22.7% after Connecticut's attorney general asked for data in regard to a ongoing civil suit regarding the company's billing practices.

Arthur Hogan, chief market analyst at

Jefferies

, who recommended Providian in this space on

Friday, referred this reporter to the company's analyst who follows the stock. Charlotte Chamberlain, a senior vice president in equity research at Jefferies, was unavailable.

The S&P was able to close higher, however, thanks largely to a rebound in energy stocks such as

Exxon

(XON) - Get Intrexon Corporation Report

, which rose 5.2%. The

American Stock Exchange Oil & Gas Index

rose 4.5%. Other cyclicals did not fare as well, notably paper stocks; the

Philadelphia Stock Exchange Forest & Paper Products Index

shed 2.8%.

In NYSE trading, 806.8 million shares were exchanged while declining stocks led advancers 1,697 to 1,346. In

Nasdaq Stock Market

action 1.29 billion shares traded while gainers led 2,092 to 1,947. New 52-week lows outpaced lows 88 to 67 on the Big Board while new highs led 210 to 83 in over-the-counter trading.

Among other indices, the

Dow Jones Transportation Average

rose 27.22, or 0.9%, to 3031.21; the

Dow Jones Utility Average

slid 1.09, or 0.4%, to 302.18; the

Russell 2000

gained 2.66, or 0.6%, to 445.07; and the

American Stock Exchange Composite Index

added 0.26 to 809.47.

The price of the 30-year Treasury bond dipped 1/32 to 100 29/32, its yield rising to 6.06%.

Elsewhere in North American equities, the

Toronto Stock Exchange 300

fell 10.83 to 7286.8 and the

Mexican Stock Exchange IPC Index

rose 23.99 to 5943.96.

Monday's Company Report

By Tara Murphy
Staff Reporter

(

Earnings estimates from First Call; earnings reported on a diluted basis unless otherwise specified. New highs and lows on a closing basis unless otherwise specified.

)

District Court Judge Thomas Penfield Jackson released his findings of fact in the Microsoft case Friday night, stating in part that the software titan enjoys monopoly power in the personal computer market. Four firms kept left Microsoft's stock ratings unchanged.

Banc of America Securities

maintained a buy rating on the stock, as did

PaineWebber

, while

Credit Suisse First Boston

maintained a strong buy rating on the stock.

Warburg Dillon Read's

buy rating and price target of 110 were unchanged, with the firm saying it saw no major surprises in the findings of fact. Shares of Microsoft fell 1 5/8 to 89 15/16. For more information, check out

TheStreet.com's

coverage of the Microsoft decision.

Mergers, acquisitions and joint ventures

Arch Communications

(APGR)

fell 19/32 to 6 3/16 and

Paging Network

(PAGE)

inched up 1/16, or 6.7%, to 1 1/32 after the companies agreed to a merger to combine PageNet's wireless network and products with Arch's accounts and sales presence nationwide. Arch shareholders will retain one share of common stock in the combined company for each share currently owned, while PageNet shareholders will receive 0.1247 share of common stock for each share of PageNet currently owned.

First Charter

(FCTR) - Get First Trust Lunt U.S. Factor Rotation ETF Report

fell 1 11/16, or 9%, to 17 1/8 after it agreed to buy

Carolina First BancShares

(CFBI) - Get Community First Bancshares, Inc. (Georgia) Report

for $260 million in stock, in an effort to strengthen its presence in the North Carolina region's growing metropolitan areas. Each Carolina First shareholder will receive 2.267 shares of First Charter common stock for every share of Carolina First. Shares of Carolina First jumped 9 1/2, or 38.8%, to 35.

Autocam

(ACAM) - Get Acamar Partners Acquisition Corp. Class A Report

rose 4 1/4, or 33.3%, to 17 after it agreed to be bought by

Tital Acquisition

, a company formed by

Aurora Capital Group

of Los Angeles, for $18.75 a share.

Enron

(ENE)

edged up 7/16 to 38 3/8 after saying it would sell its

Portland General Electric

utility unit to

Sierra Pacific

(SRP)

for $2.1 billion in cash. Sierra Pacific slipped 1/2 to 21 1/8.

Globix

(GBIX)

jumped 5 1/8, or 14.2%, to 41 1/4 after it said

Hicks Muse Tate & Furst

would invest $80 million in the company.

Homestore.com

(HOMS)

hopped 10 7/16, or 22%, to 59 after it said it entered into a $20 million, multiyear marketing and e-commerce alliance with

GMAC Mortgages

and

GMAC Homes Services

.

HSBC Holdings

(HBC)

,

Republic New York

(RNB)

and

Safra Republic Holdings

have reached a deal to allow HSBC to close its planned acquisition of the two banks. HSBC lost 7/16 to 61 9/16, while Republic New York gained 4 7/16, or 6.7%, to 70 5/8.

Tivoli

, a unit of

IBM

(IBM) - Get International Business Machines (IBM) Report

, said it is in pacts with

Cisco

(CSCO) - Get Cisco Systems, Inc. Report

and Telcordia to manage carrier networks. IBM tacked on 3 11/16 to 92 13/16, while Cisco rose 1 7/8 to 75 5/16.

Lodgenet

(LNET)

lost 15/16, or 5.5%, to 17 7/8 after saying it will sell its stake in

1stUp.com

to

CMGI

(CMGI)

, in a stock deal. CMGI slipped 11/16 to 104 1/4.

Prodigy Communications

(PRGY)

fell 2, or 8.1%, to 22 5/8 after it said it was buying

FlashNet Communications

(FLAS)

. Prodigy will issue 0.35 shares of Prodigy stock for each FlashNet share. Shares of FlashNet fell 1 5/8 to 8 7/16.

Rural Cellular

(RCCC)

lost 3/4 to 59 3/4 after it said it will acquire the cellular telephone licenses, operations and related assets of

Triton Cellular Partners

for $1.24 billion.

Siebel Systems

(SEBL)

jumped 6 1/8 to 134 3/8 and

Ariba

(ARBA)

flew 8 3/8 to 181 1/2 after the companies announced an e-commerce software alliance.

Venator

(Z) - Get Zillow Group, Inc. Class C Report

slipped 9/16, or 7.3%, to 7 3/16 after it announced its plans to sell its Australian footwear division

Colorado Group

, in an offering that would rake in $75 million. Credit Suisse First Boston Australia will serve as the deal's underwriter.

Williams

(WMB) - Get Williams Companies, Inc. Report

gained 13/16 to 35 13/16 after it said it has inked a deal to sell

Thermogas

to

Ferrellgas

(FGP) - Get Ferrellgas Partners, L.P. Report

for $432.5 million. Shares of Ferrellgas rose 1/4 to 15.

Earnings/revenue reports and previews

BP Amoco

(BPA)

gained 3 7/16, or 6.6% to 55 3/4 after it said its third-quarter replacement cost profit was $1.955 billion, a 72% increase over the year-ago period, thanks in part to higher oil prices. Meanwhile, BP Amoco and

Atlantic Richfield

(ARC) - Get ARC Document Solutions, Inc. Report

said Friday they reached a provisional agreement with Alaska in an effort to help it move ahead with its planned takeover of Arco, which closed 6 11/16, or 8.2%, to 88 9/16.

Complete Business Solutions

(CBSI)

climbed 2 1/4, or 16.4%, to 16 1/16 after it posted third-quarter earnings of 22 cents a share, in line with the seven-analyst estimate but down from the year-ago 24 cents before charges.

May Department Stores

(MAY)

lost 9/16 to 32 7/8 after it posted third-quarter earnings of 38 cents a share, in line with the 19-analyst estimate and up from the year-ago 35 cents.

Primark

(PMK)

added 7/8 to 25 7/8 after it reported third-quarter earnings of 23 cents a share, a penny better than the three-analyst estimate but down from a year-ago 26 cents a share before charges. Primark said it plans to make an initial public offering of about 40% of the equity in

Yankee Group

, its tech research and advisory services division..

Prime Retail

(PRT) - Get PermRock Royalty Trust Report

inched up 3/16 to 7 1/2 after it reported third-quarter funds from operations of 38 cents a share, in line with the five-analyst estimate and a penny better than a year ago.

Rayovac

(ROV)

added 5/16 to 25 3/4 after it reported fourth-quarter pro forma earnings of 33 cents a share, a penny better than the six-analyst estimate and up from a year-ago 20 cents a share.

Wyndham International

(WYN)

was unchanged at 3 1/16 after it posted a third-quarter loss of 41 cents a share including charges, compared with a year-ago loss of $1.02 a share, also on charges. The single-analyst estimate was for a loss of 1 cent a share.

Offerings and stock actions

Actuate

(ACTU)

gained 5 3/4, or 12.8%, to 50 7/8 after it said its board set a 2-for-1 stock split.

National

and

Alamo Rent-A-Car

parent

AutoNation

(AN) - Get AutoNation, Inc. Report

released the details involving its planned spinoff of its car rental operations, which will be known as

ANC Rental

. AutoNation said the tax-free spinoff, which would trade on the

New York Stock Exchange

under the ticker ANR in January 2000, will be based in Fort Lauderdale and will have AutoNation founder Michael Eagan as chairman. In addition, AutoNation said it has tapped Michael Karsner as its president and CEO. Shares of AutoNation fell 1/16 to 9 15/16.

Brocade Communications

(BRCD)

jumped 8 3/8 to 299 7/8 after it set a 2-for-1 stock split.

Detroit Diesel

(DDC)

added 7/8 to 18 7/8 after it said it will buy back up to 10% of its shares.

Interep National Radio Sales

announced its plans for a 5.4 million-share IPO, which is expected to price at $11 to $13 a share.

Robertson Stephens

,

Bear Stearns

,

HCFP Brenner Securities LLC

and

SPP Capital Partners

have been tapped to serve as the deal's underwriters.

Seagate

(SEG)

climbed 1 7/16 to 33 1/2 after it set an additional 50 million-share buyback.

Analysts actions

PaineWebber upped its rating on

Amerada Hess

(AHC) - Get A.H. Belo Corporation Class A Report

to buy from attractive. Amerada Hess shares mounted 1 7/8 to 55 3/4.

PaineWebber said it raised its price target on

Bank of New York

(BK) - Get Bank of New York Mellon Corporation Report

to 52 from 48. Bank of New York shares added 1 1/4 to 42 1/8.

ING Barings

initiated coverage of

Columbia/HCA Healthcare

(COL)

with a buy rating. Columbia/HCA gained 1/8 to 25 1/8.

Banc of America Securities upped its price target on

Corning

(GLW) - Get Corning Inc Report

to 105 from 85. Corning rose 1 5/16 to 82 1/16

Schroder

analyst Michael Mayer upped his weighting on the major oil companies -- including Exxon,

Mobil

(MOB)

and

Chevron

(CHV)

-- to 175% from 160%. Mobil shares climbed 5 5/8, or 6.1%, to 97, while Chevron gained 7/16 to 15 15/16. Exxon climbed 3 11/16, or 5.2%, to 74 5/16.

Lehman Brothers

raised its rating on

Lucent Technologies

(LU)

to buy from neutral and set a one-year price target of 90. Lucent Technologies added 3 5/8, or 5.3%, to 71 1/8.

Warburg Dillon Read started coverage on

Medarex

(MEDX)

with a buy rating. Medarex rose 10.1% to 9 1/8.

Credit Suisse First Boston analyst Wendell Laidley upgraded shares of

New Era of Networks

(NEON) - Get Neonode Inc. Report

to buy from hold and upped his price target to 58 from 32. New Era of Network shares mounted 7 11/16, or 17.8%, to 50 1/2.

Credit Suisse First Boston started coverage of

Netcentives

(NCNT)

with a buy rating and a price target of 35. Netcentives lost 2 1/16, or 8.6%, to 22.

Credit Suisse First Boston added

Nortel Networks

(NT)

to its focus list. Nortel shares hopped 11/16 to 69 1/2.

Deutsche Banc Alex. Brown

recommended

Staples

(SPLS)

as a growth stock at a reasonable price. Staples share slipped 3/16 to 17 7/16.

Merrill Lynch

started coverage of

StarMedia Network

(STRM) - Get Streamline Health Solutions, Inc. Report

with a near-term accumulate rating. StarMedia Network added 1 11/16, or 5.3%, to 33 1/4.

TheStreet.com Inc.

(TSCM)

, the publisher of this Web site, fell 1 15/16, or 11.7%, to a postoffering low of 14 1/2 after

Hambrecht & Quist

downgraded it to market perform from buy. H&Q was an underwriter of the company's May IPO. TheStreet.com on Friday

announced the immediate resignation of Chairman and CEO Kevin English.

Banc of America Securities sliced its rating on

Tommy Hilfiger

(TOM)

to a buy from a strong buy. Shares of Tommy skidded 1 11/16, or 6.2%, to 25 5/16.

Warburg Dillon Read cut its 2000 earnings per share estimates on

Wackenhut

(WAK)

to $1.50 from $1.55. Wackenhut shares slid 3/16 to 18 1/8.

Morgan Stanley Dean Witter

said it re-initiated coverage of

Weyerhaeuser

(WY) - Get Weyerhaeuser Company Report

at outperform and set a price target of 72. Weyerhaeuser retreated 1 13/16 to 62 7/16.

Miscellany

CompuCom

(CMPC)

popped 1/4, or 8.1%, to 3 5/16 after it said it named Edward Coleman as CEO, effective Dec. 1. Coleman, who was previously an executive at

Computer Sciences

(CSC)

, replaces Ed Anderson, who resigned in July.

Online grocer

Peapod

(PPOD)

lost 1 1/4, or 10.8%, to 10 5/16 after it said it has more than $15 million in cash and marketable securities, in response to rumors it is out of cash. The company said it is in talks with parties interested in investing in the company.

TheStreet.com/nytimes.com

joint newsroom wrote a

story on the company earlier today.

priceline.com

(PCLN)

hopped 9 3/16, or 17.4%, to 61 3/4 after it said it would offer name-your-own-price long-distance service.

Providian Financial

(PVN)

plummeted 26 1/4, or 22.7%, to 89 1/4 after it said it has received an inquiry from the Connecticut Attorney General requesting information in connection with a civil investigation into credit card company's card-issuing and billing practices.

Raytheon

(RTN.A)

plans a vast revamp of its defense-electronics business,

The Wall Street Journal

reported, citing people familiar with the situation. The stock rose 5/8 to 26 9/16.

The Heard on the Street column in the

Journal

said a number of software companies whose business is based around Linux, the operating-system software seen as a growing threat to Microsoft, have taken to pitching themselves as dot-coms to tiptoe around the fact that the operating software can be downloaded free from the Internet. The column cites the recent IPO of

Red Hat

(RHAT)

, whose overall success has other Linux-based firms lining up behind it. Red Hat shares leapt 16 13/16, or 19.5%, to 104.