Microsoft's actions in one-day biggest fall since 2009

Sam McDermott played a PC game fable III at the Microsoft booth during the 2011 International Consumer Electronics Show (CES) in Las Vegas, Nevada on January 9, 2011.

Credit: Reuters/Steve Marcus

SEATTLE | Friday, April 29, 2011 3: 54 pm EDT

SEATTLE (Reuters) - shares in Microsoft Corp fell more in nearly two years on Friday, a day after the company reported a drop in sales of Windows operating system.

Second technology in the world behind Apple Inc. company met the estimate of Wall Street gains and surpasses global sales in its earnings report on Thursday.

But investors were concerned with lower PC sales to insist on Windows, Xbox sales by reducing the margins of profit and loss on your business online.

Microsoft shares lost 4 percent at $25.63 in Nasdaq trading in the afternoon, the highest percentage of one-day drop since July of 2009.

The actions are at the level of which were on the Monday before an increase in quarterly earnings. The stock market had increased significantly after the maker of chips Intel Corp forecast of revenues above the estimates of Wall Street, feeding optimism that a fall in sales of PC last quarter does not indicate a trend in the long term.

"Everyone, including myself, hit the table on the trade of Intel,", said Colin Gillis BGC Partners analyst. "And it simply didn't happen."

PC sales fell 1% last quarter, according to the Gartner research firm. Microsoft results reflect, although the demands of the business was overcoming the weak demand for PCs.

The balance is by 18 percent in the past 12 months, compared with a gain of 16% on the Nasdaq.

"There were two catalysts for the sharp decline of Microsoft," said Joe Cusick, optionsXpress senior market analyst firm online Chicago-based brokerage. "One, he broke the stock through the transfer of 200 average days of $26.08 and UBS reduced its target price of the material."

Analyst UBS to Brent Thill on Friday reduced its target price on Microsoft to $32 for $35, citing the long term threat posed by the tablets for the traditional PC business.

"Although" they had good profits, the PC market is under scrutiny and there is still uncertainty about whether Microsoft can compete with the growing Tablet PC and handhelds of the likes of Samsung and Motorola, said Cusick.

Traders in options, many of whom placed bets on the actions of Microsoft jumping earlier in the week - perhaps as a cover for the holding of the shares in the event of a fall - moved in a more critical way.

"There is nothing too optimistic options from Microsoft for trade on Friday compared to some of the offices Bull saw ahead of earnings," said Caitlin Duffy, analyst of options in the interactive brokers group in GreenwichConnecticut.

"For the most part, are seeing called selling options in the short term," he said, indicating the merchants seek to rid themselves of their rights to buy the shares.

In general, Microsoft analysts kept their faith that Microsoft will survive a slump in PC sales. Twenty-five of 35 analysts consulted by StarMine recommends buying the shares. Only one says sell.

As a result of the fall of Microsoft, it is close to be eclipsed by the old enemy of IBM in terms of market value. Apple surpassed Microsoft last year, is the most valuable American by $ 321 million technology company, Microsoft is the second by $ 225 million and IBM is third at $ 207 million.

(Reports by Bill rigby and Doris Frankel.) (Edited by Robert MacMillan)

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