Microsoft Rallies the Street

Good news from Redmond is good news for Wall Street. That much was clear this morning as Microsoft’s shares jumped almost $5 to $90.93 in heavy trading on the NASDAQ, leading a rally in technology stocks that appeared to assuage fears that the Asian crisis would hurt the industry’s profits.

The Microsoft surge came on the corporation’s forecast of stronger-than-expected earnings for the next two quarters. “Microsoft has a history of talking the Street down and warning that growth won’t be that strong, and then turning around and showing great growth,” says Fortune magazine’s Nelson Schwartz. “So when their predictions are upbeat the market responds.”

Schwartz believes the surge will continue: “Not only are they exceeding predictions for Q3 earnings, the new versions of Windows and Windows NT they’ll introduce later this year will push up profits even further.” Never mind the court action over Java and the IE4 unbundling order -- for now, at least, the market remains convinced that there’s gold in that thar campus.