RealTime IT News

Yahoo Paces Tech Gains

Yahoo shares edged higher Monday, lifting the tech sector for the third straight day as investors continued to speculate on the company's future.

Yahoo gained 2.3% after the company formally rejected Microsoft's nearly $45 billion bid. Microsoft responded that it remains interested in a deal, even as speculation mounted that Yahoo may pursue a partnership with Google or a merger with AOL.

Microsoft lost 1.2% on fears that the company could be forced to overpay for Yahoo, which is seeking something in the neighborhood of $40 a share.

Yahoo wasn't the only tech stock gaining on merger speculation. Salesforce.com gained nearly 8% on reports that Oracle could be interested in making a bid for the company.

The speculation helped lift stocks out of an early sell-off prompted by accounting troubles at insurance giant AIG. A Dow reshuffling — with Altria and Honeywell leaving the index in favor of Bank of America and Chevron — also kept blue chips active on the day.

Apple gained 3% on a Citigroup upgrade, while Research In Motion rose 5% on a deal with Vodafone. RIM gave back some of those gains late in the day on reports of a significant service outage.

WebMD fell 10% on its outlook and comments that its acquisition by majority shareholder HLTH may not occur.

JDS Uniphase continued to gain in the wake of last week's stellar earnings report, rising 14%.

The Nasdaq rose 15 to 2320, the S&P gained 7 to 1339, and the Dow rose 57 to 12,240. Volume declined to 3.59 billion shares on the NYSE, and 2.14 billion on the Nasdaq. Advancers led by a 17-15 margin on the NYSE, and 15-14 on the Nasdaq. Upside volume was 60% on the NYSE, and 59% on the Nasdaq. New highs-new lows were 41-119 on the NYSE, and 51-136 on the Nasdaq.