U.S. Stocks Gain on Microsoft's Yahoo Bid, Tech Stocks Lead

U.S. stocks markets closed out the week on an up note on Friday, ending Wall Street's best performing week in nearly five years, after Microsoft Corp's $44.6 billion bid for Yahoo Inc pushing technology stocks ahead of other sectors.

Microsoft Corp announced a $44.6 billion unsolicited bid to buy Yahoo! Inc. The offer is worth $31 per share, a 62 percent premium over Yahoo's closing price yesterday on the Nasdaq Stock Market. The merger news boosted tech stocks.

Yahoo shares surged $9.20, or almost 48 percent, to close at $28.38, while Microsoft shares were down $2.15, or 6.6 percent, to close at $30.45 following investor's reaction to the proposed bid.

The offer was made in a letter sent Thursday by Microsoft Chief Executive Steve Ballmer to Yahoo's board of directors. Microsoft seeks to compete more with Google Inc, its biggest rival, by improving its services ranging from email to Internet advertising sales by merging with Yahoo.

Yahoo said in a statement its directors would evaluate this proposal carefully and promptly in the context of Yahoo's strategic plans and pursue the best course of action to maximize long-term value for shareholders.

Meanwhile, Google dived 8.8 percent to $514.20, a day after reporting earnings that disappointed investors.

Tech-heavy Nasdaq Composite Index recovered from its midsession losses to rise almost 24 points to 2,413, up .98 percent. The Dow Jones industrial average climbed 94.95 points Friday to 12,745.31, up 0.7 percent. The Standard & Poor's 500 rose 16.71 points to 1,395.26, up 1.21 percent.

Also pushing the Nasdaq higher was video-game publisher Electronic Arts which closed $1.25 or 2.6 percent higher and Altera Corp. shares climbed $2.53, or almost 15 percent, to $19.42. IBM Corp gained $1.97 or 1.08 percent to close at $109.08 and Dell increased $0.31 or 1.6 percent to $20.35.

Global Markets

In Asia, the Nikkei 225 index lost 95.31 points to 13,497.16, down 0.7 percent, while Hang Seng index rose 667.84 points to 24,123.58, up 2.85 percent.

In London, the FTSE 100 ended the day up 2.54 percent, or 149.40 points, to 6,029.20.