Wall Street: Thursday close

WHAT was good for

Microsoft shares spiked $3.69 or 6.4% to $61.85 after it was reported that the company had come to terms with the US Justice Department to end the long-running battle which at one point threatened to split the company in two.

Tech shares drew heart from the potential settlement. The Nasdaq Index, which recovered 23 points on Wednesday after heavy selling earlier in the week, soared 56.10 points or 3.32% to 1,746.30. The Dow Jones Industrial Average recovered Wednesday's loss four times over, rising 188.76 points or 2.08% to 9,263.90.

'There are some folks out there that would make the reversal in the market back in 2000 coincident with the Government's war on Microsoft,' said Charles White, president of investment firm Avatar Associates. 'So if we get some sort of settlement that would be good, but the market is going to be jumpy.'

Bob Harrington of UBS Warburg said that 'Microsoft was the biggest news of the day. 'The Microsoft has given the market a positive bent,' he said.

But analysts cautioned that the deal apparently accepted by the Bush Justice Department appeared 'soft' on Microsoft and could be disputed by some of the 18 State Attorney-Generals who are party to the three-year-long anti-monopoly case. Washington has been trying to help Wall Street and US business in the wake of the 11 September terrorist attacks.

The economic news backdrop remained gloomy. Consumer spending tumbled 1.8% in October, its biggest monthly drop in four decades. The National Association of Purchasing Management's manufacturing index came in at 39.8, down from 47 in September. A figure below 50 indicates continued contraction in the manufacturing sector. Separately, the total number of Americans receiving unemployment checks remained at an 18-year high.

Among techs, chipmakers Intel added $1.52 or 6.2% to $25.94 and Broadcom firmed $2.92 0r 8.5% to $37.33. Network gear maker Cisco Systems tacked on 74 cents or 4.4% to $17.66. Oracle, number two to Microsoft in software, vaulted 61 cents or 4.5% to $14.17 and network computing giant Sun Microsystems jumped 69 cents or 6.8% to $10.84.

Airlines Delta and UAL had an excellent day, despite reporting big losses in line with expectations. Delta lost $259m., while UAL said its quarterly losses were a record $1bn. Delta shares surged 80 cents or 3.5% to $23.66 and UAL, parent of United Airlines, closed up 38 cents or 3% to $13.10.

Enron, the world's biggest energy trader, continued its descent in the wake of a Securities and Exchange Commission investigation into investment partnerships run by its former chief financial officer. Enron shares, at $85 a year ago, slipped another $1.91 or 13.7% to $11.99.

Trump Hotels, the lodging and casino company headed by Donald Trump, fell 15 cents or 15% to 85 cents, down from $3.12 in the past 52 weeks, after it confirmed it would not pay interest due on its borrowings. Trump said the company was conserving cash in the face of a rising threat to its New Jersey casinos from recently approved gaming houses to be established in neighboring New York.

Among Dow components, American Express rose 31 cents or 1% to $29.74, heavy equipment maker Caterpillar shed 48 cents or 1% to $45.20 and cigarette maker Phillip Morris added 80 cents or 1.7% to $47.60.