Sun, Fed Keep Tech Stocks Rallying
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Shares of Sun Microsystems (NASDAQ: JAVA) rocketed 79% Wednesday on reports that the company is in talks to be acquired by IBM (NYSE: IBM).
News that IBM sees value in Sun's beaten-down shares sent tech stocks higher for the sixth time in seven days, while blue chip shares rallied after the Federal Reserve said it plans to inject $1 trillion into the treasury and mortgage markets.
After the close, Oracle (NASDAQ: ORCL) kept the good feeling going when the enterprise software giant reported better than expected quarterly results. Oracle's earnings of 35 cents a share were three cents better than expected, and sales rose 2% to $5.5 billion, beating the $5.45 billion Thomson Reuters forecast. The company even declared its first dividend, but middleware and database licensing sales were weaker than expected. Oracle shares were up 6% in after-hours trading on the news.
AMD (NYSE: AMD) and VMware (NYSE: VMW) were big gainers during the day, rising 7% each, while HP (NYSE: HPQ) lost 2.5%.
NetApp (NASDAQ: NTAP) was up 8% even though it is a partner of IBM but not Sun. There was some speculation that an IBM-Sun deal could make a NetApp-Sun patent dispute go away, while others said the deal could make NetApp an acquisition target.
Adobe (NASDAQ: ADBE) soared nearly 12% after its results beat estimates.
Yahoo (NASDAQ: YHOO) and Research in Motion (NASDAQ: RIMM) ended the day lower.
The Nasdaq rose 29 to 1491, the S&P 500 gained 16 to 794, and the Dow climbed 90 to 7486. Volume soared to 10.53 billion shares on the NYSE, and 2.82 billion on the Nasdaq. Advancers led by a 30-7 margin on the NYSE, and 19-8 on the Nasdaq. Upside volume was 89% on the NYSE, and 89% on the Nasdaq. New highs-new lows were 10-72 on the NYSE, and 14-45 on the Nasdaq.