Wall Street turned in a mixed performance Monday as traders, still dizzy from Friday's record-setting surge in blue-chip prices, relaxed a bit and pocketed some of their newly won profits.
Tech stocks, meanwhile, posted impressive gains throughout the day. Enthusiasm was bolstered by Intel coming to terms with the US Federal Trade Commission over antitrust charges against the chipmaker. Both sides filed a joint motion to have the complaint withdrawn.
The Dow Jones Industrial Average shed 8.47 points to close at 9727.61. The Nasdaq Composite Index rose 60.51 to 2397.62, and the S&P 500 was up 7.26 at 1282.73.
Just a day before the trial was set to begin, Intel (INTC) and the FTC apparently decided there was room to compromise in settling charges that the chipmaker illegally cut off technical information to companies that failed to license key patents. Intel CEO Craig Barrett called the pact "a win-win for both parties," and said the deal "gives us value for our intellectual-property rights."
Maybe. Or maybe the government decided that hobbling Intel in the same manner that International Business Machines was hamstrung in the '80s wouldn't be in the best interests of the tech-driven US economy. By this thinking, a certain amount of rough stuff not only is to be expected in the industry, but must of necessity be tolerated by regulators.
"Do you want to get cancer or do you want a really bad flu?" asked Clay Ryder, an analyst with Zona Research. "Most people would opt for the flu."
Ultimately, he said, the government may have decided that it would be difficult proving that any misdeeds on Intel's part had a profoundly negative impact on the rest of the tech industry. "Maybe Intel has done a few things that are questionable," Ryder observed. "But it's hard to argue that the entire PC business hasn't thrived in recent years.
"The industry is maturing," he added. "Aggressive, shoot-em-up, wild west, OK Corral behavior isn't really accepted anymore. The expectation is that the industry will behave in a more mature fashion."
Be that as it may, Intel's stock advanced US$5 to $119.63. The proposed settlement still must be approved by the full four-member commission within the next few days.
So what does this say about the government's separate antitrust charges against Microsoft? Most observers figure the case against Redmond is too far along to be summarily dismissed at this stage, but the Intel settlement at least suggests which way the prevailing wind is blowing. The trial is now in recess.
In any case, Microsoft (MSFT) had some news of its own to keep its stock afloat. The company's shares gained $4.06 to $159 on reports that Bill Gates will announce an initiative to get hundreds of millions of Chinese online when he visits the bustling city of Shenzhen on Wednesday. The idea apparently is to promote set-top boxes that would provide Net access via one's TV -- and, not coincidentally, provide a boost to making Windows CE the operating system of choice for such boxes.
Microprocessor maker VLSI Technology (VLSI) fell 6 cents to $18.25 as it added some more venom to its poison-pill defense against a hostile takeover by Royal Philips Electronics. If any new shareholder purchases more than a 10 percent stake in the company, VLSI now will automatically deluge existing shareholders with additional stocks, making a takeover try substantially more expensive. Philips had offered about $777 million for VLSI.
Speaking of expensive, Seagate Technology (SEG) slid 75 cents to $29.13 after saying it will take a fiscal third-quarter charge of as much as $60 million to pay for current restructuring moves. The leading maker of computer disk drives didn't say what this would do to its bottom line, but it now seems a stretch that the company will hit analysts' estimated 46-cents-a-share profit for the current quarter.
Last week, Seagate said it wouldn't be harmed by Dell Computer's decision to purchase $16 billion worth of components from IBM over the next seven years. How convinced do you feel by that declaration?
BMC Software (BMCS) jumped $2.63 to $40.81 after agreeing to buy Israeli developer New Dimension Software for approximately $650 million. BMC said the deal goes hand in hand with its earlier acquisition of mainframe-application maker Boole & Babbage, which is the exclusive European distributor of New Dimension's wares.
Network-systems developer Novell (NOVL) surged 16 percent to $23.31 following a story in Barron's extolling the company's recovery efforts. After struggling for a sense of purpose, the magazine said, Novell is now seeing a sales boom for its products that help bring order to enterprise network operations.
On the Internet front, CNET (CNET) saw its shares climb 24 percent to $208.13 ahead of a two-for-one stock split. And eBay (EBAY) was up 15 percent at $171 after a three-for-one split of its own stock last week.
NetB@nk (NTBK), America's biggest online bank, rose 11 percent to $53.50 after saying it was opening new accounts at a faster clip than anticipated. NetB@nk added about 3,000 more accounts last month, and claims it's on track to grow even more in March.
7thStreet.com (SEVL) vaulted 77 percent to $8.84 after inking a pact for GeoCities members to sell 7thStreet's computer tutorials on their Web sites. On Friday, the software firm cut a deal to provide its know-how to America Online subscribers. You can almost hear the day traders sighing in relief to have another dot com to fool around with.
DaimlerChrysler (DCX) slipped $1.44 to $89.56 amid reports that the company is duking it out with France's Renault for a stake in Nissan Motor. Ailing Nissan is believed to be eager to sell a third of its shares to a deep-pocketed foreign heavyweight by the time the Japanese fiscal year ends later this month.
Lastly, some news from the dump. Garbage hauler Browning-Ferris (BFI) advanced 12 percent to $38.88 after rival Allied Waste Industries (AW) said it would purchase the company for more than $9 billion. Allied Waste was up 13 percent at $16.94.
In case you didn't know, this merger will create the world's second-largest trash outfit. The biggest boy on the block remains a powerhouse called Waste Management. For other such fascinating tidbits, go here.
