Investors Reward Microsoft

Stocks had another volatile day on Friday, but Microsoft started the day out higher and spent the whole day that way.

Late Thursday, Microsoft reported quarterly revenues that missed expectations, but investors overlooked that miss to focus on the company’s strong guidance of 9%-11% sales growth for the next five quarters.

Microsoft said it sees fiscal fourth-quarter revenues of $10.1-$10.2 billion, and fiscal 2006 sales of $43.3-$44.1 billion, both in-line to above Wall Street expectations, driven by new Xbox and SQL Server products. And after that, the company plans new versions of its Windows operating system and Office products.

The strong outlook was enough to send Microsoft shares 3.5% higher on the day.

Stocks finished the day strong in volatile trading, as a steep drop in oil prices late in the day offset an earlier decline on concern about rising inflation and falling consumer confidence.

The Nasdaq rose 17 to 1921, the S&P 500 gained 13 to 1156, and the Dow surged 122 to 10,192. Volume rose to 2.36 billion shares on the NYSE, and 2.1 billion on the Nasdaq. Advancers led 21-10 on the NYSE, and 18-12 on the Nasdaq. Upside volume was 70% on the NYSE, and 70% on the Nasdaq. New highs-new lows were 44-137 on the NYSE, and 26-224 on the Nasdaq.

Siebel gained 5% on reports that Oracle may be interested in acquiring the company.

Sun rose 5% on reports that the company may go private.

KLA-Tencor , Microstrategy , Looksmart and Iomega fell on their quarterly reports.

WebMD , Netgear , Flextronics and Ingram Micro rose on their results.

News Around the Web