Day Traders Can Remove Seat Belts — Microsoft Will Probably Stay Intact

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Weak-kneed day traders have reason to smile: The political winds swirling around the Microsoft antitrust trial seem to have changed in the software maker's favor. Traders widely blame Monday's conclusions of law, in which U.S. district judge Thomas Penfield Jackson ruled that the Redmond dragon abused its monopoly power, as the catalyst behind the wild ride on the NASDAQ this Monday and Tuesday. The deepest-seated fear on the Street was that the firm that has buoyed the tech stock explosion would be broken up — and with it the boom. But Wednesday such a breakup became a remote possibility. First, Jackson informed the 19 states' attorneys general who brought the case (along with the Justice Department) that they merely needed to reach a majority opinion, not unanimity, on a proposed remedy in the trial. Then a handful of the attorneys joined the growing number who say they won't seek a breakup. Considering that Justice has long hinted at more lenient penalties than what the attorneys were asking for, it seems extremely unlikely that the judge will be asked to break the company up.

If that weren't enough, Republican leaders in Congress, including Trent Lott, capped off the day by pressing Justice to back down even further, with calls for an investigation into whether the DOJ was overzealous in prosecution. Oklahoma's Rep. J. C. Watts went as far as to try to pin the stock market's volatility on Democrats, saying, "The dive in the NASDAQ market is a direct result of the Clinton-Gore administration meddling with the private sector." But regardless of the remedy prescribed by Justice and the attorneys general, Microsoft is expected to appeal the case. And considering that the appellate courts are more conservative than Judge Jackson's district court, it's a safe bet that their remedy will be less harsh than what's decided in late May. That should go a long way toward easing the jitters still lingering on the trading floor.