So Much For Free Markets

Thursday was a red-letter day for government intervention in free markets.

First came reports that the EU is about to find Microsoft guilty of antitrust violations, and Japan is also taking aim at the software giant.

We’ve said it before and we’ll say it again: the long history of antitrust law is that by the time these cases are settled, the market has changed, and the original basis for antitrust action is gone. Did anyone envision AT&T fighting for its life just two decades after an antitrust settlement split up the company?

Likewise, the market for desktop operating systems will change far beyond anyone’s expectations, and may already have, witness the rise of Linux and the security issues facing Microsoft.

The second development was the Justice Department’s rejection of Oracle’s bid to acquire PeopleSoft on grounds that the combined company would dominate enterprise software.

Keeping a watchful eye on corporate excesses is in general a good idea, but we suspect that the market has much different ideas than the government in these cases, and they will be revealed in the fullness of time.

The market was mixed Thursday. Blue chips fell on a weaker than expected durable orders report, but tech stocks got a boost from the report’s revelation that communications equipment sales are brisk.

The Nasdaq gained 9 to 2032, the S&P 500 climbed 1 to 1144, and the Dow slipped 21 to 10,580. Volume rose to 1.38 billion shares on the NYSE, and 1.76 billion on the Nasdaq. Advancers led 20-12 on the NYSE, and 19-12 on the Nasdaq. Upside volume was 65% on the NYSE, and 69% on the Nasdaq. New highs-new lows were 199-4 on the NYSE, and 121-5 on the Nasdaq.

After the close, , Autodesk and Marvell beat estimates, while McData missed revenue estimates.

During the day, Novellus edged higher after raising guidance, but analysts were concerned that spending by chip makers remains restrained.

Iron Mountain gained 6% after beating estimates.

Sandisk and Netflix jumped on positive company comments.

Cray fell 8% on an acquisition.

Acacia soared 20% on a deal with Disney .

Rambus fell 4% on news of yet another legal round with the FTC.

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