Billions And Billions To Spend

Microsoft had better have a big announcement by its annual analyst meeting on July 29 or investors are going to be mighty disappointed.

What Microsoft plans to do with its $56 billion cash hoard was the subject of intense speculation again on Thursday, as analysts guess what the company will do with its billions now that its antitrust troubles are winding down.

Goldman Sachs analyst Rick Sherlund – believed to have high-level sources at Microsoft – got the speculation started on Tuesday when he said Microsoft could announce a $40 billion stock buyback, which would be 13% of the company’s outstanding shares and could give the stock a nice boost.

First Albany analyst Mark Murphy said today that Microsoft could announce a special dividend, a large buyback, and an increase in its regular dividend.

Others see Microsoft making a big move into security, and possibly making large acquisitions in coming months.

Whatever happens, it better be exciting after all this buildup.

Stocks lost ground during the day on higher than expected wholesale inflation and a warning from Jabil . Jabil fell 13%, leading the chip sector to a 3% loss on the day.

The Nasdaq fell 14 to 1983, the S&P 500 slipped 1 to 1132, and the Dow declined 2 to 10,377. Volume rose to 1.29 billion shares on the NYSE, and 1.48 billion on the Nasdaq. Advancers led 18-13 on the NYSE, but decliners led 18-12 on the Nasdaq. Upside volume was 56% on the NYSE, and 29% on the Nasdaq. New highs-new lows were 130-40 on the NYSE, and 60-43 on the Nasdaq.

After the close, Adobe slipped despite beating estimates and raising guidance. Red Hat fell after missing revenue estimates. Tibco beat estimates.

During the day, Accenture jumped 6% after raising guidance and getting backing from Congress for its $10 billion homeland security deal.

SupportSoft soared 27% on a deal with BellSouth , and Proxim soared 28% on a WiMax collaboration with Intel .

Progress Software gained 5% after beating estimates and raising guidance.

Synaptics climbed 6% on an upgrade.

SimpleTech plunged 20% on a warning.

Symbol Tech slipped on an acquisition.

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