Microsoft gains on buyback, but sector sinks

Shares of Microsoft Corp. advanced Monday after the company unveiled a $40 billion buyback, but lost many of their earlier gains as the rest of the tech sector retreated with the broader market.

Microsoft was up more than 2% earlier in the day after the software giant raised its quarterly dividend and announced a major stock-buyback plan. Read story.

The company also got a big endorsement amid the market uncertainty after Standard & Poor's and Moody's Investors Service both assigned it AAA ratings.

But Microsoft stock eventually got swept back by the sector retreat, managing to hold onto a roughly 1% gain to close at $25.40.

Meanwhile, tech stocks wallowed in red, as the Nasdaq Composite Index fell 4.2% to close at about 2,179 points. The Morgan Stanley High Tech 35 Index retreated 4.4%. The Philadelphia Semiconductor Index was off nearly 4.6%.

The Dow Jones Industrial Average fell roughly 373 points as investors reacted to more details of the Wall Street bailout plan.

Major tech giants also fell, including Advanced Micro Devices Inc. and Amazon.com Inc. both down more than 7%. Server maker Sun Microsystems Inc. was off about 12%, while search giant Google Inc. was down 4.2%; Apple Inc. was off 7%.

Source: MarketWatch