Software Sector Put In Play By Ruling

Thursday’s landmark ruling that Oracle can proceed with its bid to acquire PeopleSoft could recast the enterprise software landscape.

The decision will likely put pressure on PeopleSoft to sit down and talk with Oracle, and could put other companies in the sector in play too. PeopleSoft may also have another suitor, according to speculation at the company, and Microsoft has also reportedly been interested in investing in the company.

PeopleSoft jumped 10% on the ruling, but finished below Oracle’s latest $21 a share offer. Oracle gained 5% because at that price, PeopleSoft would add to its earnings.

A number of companies that Oracle had also expressed interest in posted strong gains Friday, among them Business Objects , Siebel , BEA and Lawson .

SAP , which was once a target of Microsoft , gained 5%.

The ruling could mean major changes for enterprise software, but it could also have ramifications for the broader market and antitrust law in general. The ruling could lead to more mergers, and the Justice Department could become more hesitant to oppose them on antitrust grounds.

Stocks gained Friday on the ruling and a report showing tame wholesale inflation, led once again by tech stocks, but blue chips lagged on an earnings warning from Alcoa .

The Nasdaq surged 24 to 1894, the S&P 500 rose 5 to 1123, and the Dow gained 23 to 10,313. Volume declined to 1.26 billion shares on the NYSE, and 1.61 billion on the Nasdaq. Advancers led 19-12 on the NYSE, and 19-11 on the Nasdaq. Upside volume was 67% on the NYSE, and 83% on the Nasdaq. New highs-new lows were 140-11 on the NYSE, and 99-39 on the Nasdaq.

eBay climbed 2% on news that CEO Meg Whitman has no interest in the top job at Disney .

NetSolve soared 22% on news that it will be acquired by Cisco .

Transmeta fell 9% on a warning.

EDS rose 3% on plans to cut as many as 20,000 jobs.

Ameritrade gained 5% despite lowering guidance.

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