Wall Street prepares to pass judgement on Microsoft

Hi-tech stocks face a pounding later today when Wall Street passes its own judgement on Microsoft in the wake of Friday's ruling against the company.

With uncertainty over what happens next, many analysts expect investors to react badly to US District Judge Thomas Penfield Jackson's declaration that Microsoft had abused its position to stifle competition and hurt consumers. Microsoft has been found guilty, but the matter of its punishment may be a long process.

At a post-ruling press conference, Microsoft chief executive Bill Gates declined to be drawn on the impact of the ruling. "Microsoft is not a prognosticator of the stock market, not up, not down, not sideways," he said. "I'm not going to speculate on the market one way or the other."

If the reaction of the market in after-hours trading on Friday is anything to go by, Microsoft stock is in for a pounding. It slid more than four per cent from its Nasdaq close of $91.56 and one quarter. In Europe, the company saw sharp falls, dropping nearly $9 to $82 and seven-eighths in early morning trading.

But the wider concern is that any run on Microsoft would also lead to a lack of enthusiasm for the hi-tech market as a whole. Investment houses Goldman Sachs and JP Morgan have already warned that the ruling leaves Microsoft in an uncertain position. Some Wall Street watchers predict that the situation could knock 40 points off the Dow Jones average at Monday's Wall Street opening.