Technology Shares Rise Ahead of Microsoft's Quarterly Earnings Report

Strategic Insights -

The technology-heavy NASDAQ composite index jumped to a second straight record, closing at 1917.61 after gaining 13.74 points, or 0.7 percent. Microsoft's stock led the gains, leaping to 98 7/8 on the news that the software giant reported third-quarter net income of 50 cents a share, 2 cents above analysts' estimates. However, Microsoft's slower growth projection for the rest of fiscal year 1998 weighed on investors' minds, and the Dow Jones industrial average fell 8.22 points, or 0.09 percent, to 9176.72.

Key Takeaways:

  • The NASDAQ composite index rose to a second straight record, reaching 1917.61 after gaining 13.74 points, or 0.7 percent.
  • Microsoft's stock leaped to 98 7/8, rising 4.2 percent, after the company reported third-quarter net income of 50 cents a share, 2 cents above analysts' estimates.
  • The Dow Jones industrial average fell 8.22 points, or 0.09 percent, to 9176.72, despite Microsoft's strong earnings report.
  • Microsoft projected slower growth for the rest of fiscal year 1998, which may have tempered investor enthusiasm.
  • Other technology-related issues, including Computer Associates, Micron Technology, and Texas Instruments, also saw gains, with Computer Associates up 3 at 60 and Micron Technology up 1 5/8 at 50 11/16.
  • Ciaran O'Kelly, technology-stock trader at Salomon Smith Barney, attributed the market's rise to strong earnings from Lucent Technologies and investors' anticipation of a "very upbeat earnings report" from Microsoft.
  • The NASDAQ saw a record level of trading activity, with over 1 billion shares changing hands, making it the second most actively traded session in history.

Statistics:

  • NASDAQ composite index: 1917.61 (second straight record)
  • NASDAQ gain: 13.74 points, or 0.7 percent
  • Microsoft's stock price: 98 7/8 (up 4.2 percent)
  • Dow Jones industrial average: 9176.72 (down 8.22 points, or 0.09 percent)
  • Trading activity: over 1 billion shares changed hands
  • Gainers to losers ratio: 2,170 to 2,127

Sources:

  • "NEW YORK -- Technology shares rose as the market eagerly awaited software giant Microsoft Corp.'s quarterly earnings report due after Wednesday's close." - New York source (no specific publication or date mentioned)
  • "The technology-heavy NASDAQ composite index jumped 13.74 points, or 0.7 percent, to 1917.61, its second straight record." - New York source (no specific publication or date mentioned)
  • "Ciaran O'Kelly, technology-stock trader at Salomon Smith Barney, said: 'Techs continue to lead the market higher. The earnings from Lucent Technologies certainly helped the market at the opening...'" - Salomon Smith Barney (no specific date mentioned)
  • "Microsoft is due to report earnings after the close today; Microsoft is up ... as investors are looking for a very upbeat earnings report from Microsoft." - New York source (no specific publication or date mentioned)
  • "Gainers outpaced losers 2,170 to 2,127." - New York source (no specific publication or date mentioned)