stock survived an onslaught of early selling Monday following the company's severe setback in the federal antitrust case against it and managed to end the day with only a modest loss.
Volume was extraordinarily heavy, as more than 120 million shares were traded.
At the 4 p.m. EST close, Microsoft's shares were down 1 5/8 at 89 15/16, well above its intraday low of 84 3/8, set shortly after the stock opened for American trading.
The turmoil in Microsoft's stock did not extend to the overall
stock market, which was stable. The
Dow Jones Industrial Average
, which Microsoft joined just a week ago, closed up 14.37 at 10,718.85, while the
Nasdaq Composite Index
ended up 41.68 at 3,143.97, its seventh straight record high.
And shares of some Internet, computer and software companies surged as investors saw signs that Microsoft's dominance could fade.
On Friday, U.S. District Court Judge Thomas Penfield Jackson blasted Microsoft in his findings of fact, the first of three stages of his ruling in the antitrust case. He said the company has monopoly power and abuses it to keep competitors out of software markets, including the market for Internet browsers.
Microsoft managed to keep potential competitors from releasing products that would have benefited consumers, the judge said.
Some Wall Street firms backed the company Monday, advising clients and anyone who would listen that Monday's losses were an opportunity to buy. Two firms said their predictions for the company's quarterly earnings were unchanged. "In our opinion, the likelihood of a negotiated settlement has improved markedly now that it is abundantly clear where the judge stands," wrote
Salomon Smith Barney
analyst Neil Herman, reiterating his buy rating on the stock. "This would ignite the stock. We continue to believe that a breakup is unlikely." Salomon hasn't done recent underwriting for Microsoft.
Aaron Scott, analyst for
, was also standing by the stock. At worst, the courts may eventually enjoin Microsoft from selling in certain markets, but they won't break the company up, he predicted. Advest has done no underwriting for Microsoft.
Based on Judge Jackson's schedule, Scott expects an appellate court ruling by summer 2001. He also called the price drop a buying opportunity, maintaining a buy rating and leaving earnings estimates unaltered.
Department of Justice
, joined by 19 state attorneys general, sued the company in May 1998.
Among the companies whose shares benefited Monday from the Microsoft decision was
, the leading seller of
operating system, a rival to Microsoft's
. Its shares jumped 16 13/16 to 104.
shares gained 4 3/8 to 149 7/8. AOL owns
, the Internet browser company. Microsoft was accused of trying Netscape out of business by bundling its
browser with Windows.
shares gained 2 1/8 to 111 7/8. And
picked up 8 1/16 to 96 3/8.