US tech shares fall on Microsoft Windows delay

March 22 | Updated: Mar 23 2006, 06:20am hrs
US technology stocks fell in Europe after Microsoft Corp delayed in releasing the next version of its Windows program. It is clearly negative for Microsoft and the PC market as a whole, said Douglas Wright, who helps manage $1 billion in US stocks at Britannic Asset Management in Glasgow, Scotland. It will hurt sales and adds uncertainty to the market.

Dell Inc and Hewlett-Packard Co, the two biggest makers of personal computers, both declined. Bristol-Myers Squibb Co paced rising stocks after the drugmaker settled a patent lawsuit against Apotex Inc.

Nasdaq-100 Index futures fell 8 to 1682.5 in London. Eight of the 10 biggest Nasdaq 100 stocks are computer-related. Microsoft accounts for 6.9% of the measure. Standard & Poors 500 Index futures expiring in June rose 0.3 to 1307.1, while Dow Jones Industrial Average futures added 7 to 11,324.

Morgan Stanley, the No. 3 US securities firm by market value, is among S&P 500 companies reporting earnings on Wednesday. Nike Inc, the worlds largest athletic-shoe maker, slid as its orders of shoes and clothing fell short of some estimates.

Indexes fell the most in two weeks on Tuesday as a speech by Federal Reserve chairman Ben S Bernanke and a report on inflation suggested interest rates will keep climbing this year. The S&P 500 had closed at its highest in almost five years last week.

Microsoft fell 79 cents to $26.95 in Germany. Dell, the worlds biggest maker of personal computers, lost 20 cents to $30.07. Hewlett-Packard, the worlds No. 2 personal-computer maker, fell 35 cents to $33.19. Windows will be released in two stages, a shipment to businesses in November this year and a release to consumers in 2007, said James Allchin, co-president of the division in charge of the operating system.

Microsoft had planned to release the product by the holiday shopping season. The Vista version of Windows, which runs 90% of the worlds personal computers, is already two years late.

Microsoft plans a management shake-up at its Windows group, the Wall Street Journal reported on Wednesday, citing people familiar with the situation.

The setback could hurt December 2006 sales and earnings estimates by as much as 5%, analysts including Gene Munster at Piper Jaffray wrote in a note to investors.

Nike fell 28 cents to $84.67 in Germany. The company said global orders for delivery between March and July increased 2.9% to $5.4 billion. Goldman Sachs Group Inc analyst Margaret Mager had estimated orders would gain 3% to 5%. Revenue in Europe fell, hurt by a stronger US dollar and a slowdown in shoe and apparel sales. Bristol-Myers surged $2.99 to $25.07. The company and partner Sanofi-Aventis SA on Tuesday said they agreed to pay an unspecified amount to Apotex, a Canadian maker of generic drugs, when the settlement is completed.

Apotex can sell a generic version of the drug in September 2011, and then will pay royalties on the sales.

Bloomberg