Yahoo Paces Tech Gains
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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.