Settlement Prospects Lift Microsoft

REDMOND, Wash. — On a day of a broad market sell-off, shares of Microsoft Corp. on Tuesday rose 2.5% after a Goldman, Sachs & Co. analyst said the world’s biggest software maker was working to settle the antitrust case brought by the Justice Department and 19 states.

Microsoft advanced $2.25 to close at $92.88 on Nasdaq on trading of 67.4 million shares, making it the second-most active U.S. stock. Earlier, the shares reached $97.50.

Shares rose after Goldman analyst Richard Sherlund, in a note to clients after meeting with Microsoft Chief Financial Officer John Connors, said the software maker may be stepping up efforts to reach a settlement before the judge in the case makes his final ruling, expected in the next several weeks.

“Management appears very focused on settling the [Justice] lawsuit,” Sherlund wrote to clients. “While the risk of an adverse decision in the [Justice] case overhangs the stock, we are hopeful that a settlement might be reached.”

Microsoft didn’t indicate what it would be willing to accept in a settlement or whether the two sides were close to an agreement, Sherlund wrote.

Microsoft remains opposed to any breakup of the company, a remedy some antitrust enforcers have suggested, Sherlund said. Chief Executive Steve Ballmer earlier this year called talk of a breakup “absolutely reckless and irresponsible.”

A Microsoft spokesman declined to comment on the Goldman report or settlement talks.

Separately, Microsoft said it quit the Software and Information Industry Assn., a trade group that has sided with the government’s case against the company. Microsoft said other trade organizations better represent its concerns.