Yahoo Plunges, Microsoft Gains as Stocks Slip

Yahoo (NASDAQ: YHOO) shares tumbled Wednesday after the company finally struck a long-awaited search deal with Microsoft (NASDAQ: MSFT).

Yahoo fell 12% on the news, as investors were disappointed by the lack of an upfront payment. Microsoft shares rose 1.4% after getting the deal for a fraction of what it once offered to acquire Yahoo, whose shares languish at half of what Microsoft offered to acquire the company for more than a year ago.

Google (NASDAQ: GOOG) lost 0.8% on the announcement.

eFuture (NASDAQ: EFUT) fared better on its partnership with Microsoft, surging 18% on a retail software deal in China.

The rest of the market slipped as traders continued to digest weak economic reports and slumping consumer confidence.

Western Digital (NYSE: WDC) lost 2.2% despite a blow-out earnings report, as traders fretted about margin and valuation concerns.

RadiSys (NASDAQ: RSYS) tumbled 16% after beating estimates and announcing layoffs, while KeyNote (NASDAQ: KEYN) surged 19% on its earnings news.

After the close, Symantec (NASDAQ: SYMC) fell 7% after missing estimates.

The Nasdaq lost 7 to 1967, the S&P 500 slipped 4 to 975, and the Dow fell 26 to 9070. Volume fell to 5.18 billion shares on the NYSE, and 2.1 billion on the Nasdaq. Decliners led by a 22-13 margin on the NYSE, and 16-10 on the Nasdaq. Downside volume was 53% on the NYSE, and 54% on the Nasdaq. New highs-new lows were 81-39 on the NYSE, and 57-13 on the Nasdaq.