By Dan Gallagher
Tech stocks jumped Monday as the chip sector led broad gains
throughout the group, while software giant Microsoft Corp. got a
boost on a report that it plans to sell debt to fund dividends and
buybacks.
Late Monday afternoon, Bloomberg News reported that Microsoft
(MSFT) is planning to sell some of its debt in order to pay
dividends and finance share buybacks. No specific details were
given, and the article cited unnamed persons "familiar with the
matter."
Shares of Microsoft closed the day up more than 5% at $25.11.
The stock is still down nearly 18% for the year.
The entire tech sector ended the day strong, with the Nasdaq
Composite Index (RIXF) closing up 1.9% to 2,286 while the Morgan
Stanley High Tech 35 Index (MSH) rose nearly 2%. The Dow closed up
more than 80 points.
Before the open, H-P (HPQ) confirmed plans to buy
security-software maker ArcSight Inc. (ARST) for $43.50 per share,
or a total enterprise value of $1.5 billion. Rumors of the deal had
been reported earlier by The Wall Street Journal. ArcSight is based
near H-P's Silicon Valley headquarters.
The deal represented an all-time high for ArcSight's shares, and
a 54% premium over the stock's value since late August, when
reports first surfaced that the company was seeking a buyer. The
deal also comes just two weeks after H-P won an intense bidding war
over data-storage provider 3Par Inc. (PAR) against arch-rival Dell
Inc. (DELL).
Chip stocks were also strong, with the Philadelphia
Semiconductor Index (SOX) up 3.4%.
Micron Technology Inc. (MU), Advanced Micro Devices Inc. (AMD)
and Nvidia Corp. (NVDA) led the gains, while sector leader Intel
(INTC) rose 3.3% after announcing a new chip product at its annual
Intel Developer's Forum in San Francisco.
Other big tech movers included Xerox Corp. (XRX), Apple (AAPL),
IBM (IBM), Cisco Systems (CSCO), Google (GOOG) and Amazon.com
(AMZN).