Why Microsoft's Drop Isn't Holding the Dow Back

The Dow Jones Industrials (DJINDICES: ^DJI  ) is continuing its run toward another record high today, as a relative lack of troubling news concerning global markets or the government budget impasse allowed the positive momentum of yesterday's record to continue today. By 12:45 p.m. EST, the Dow was up 42 points, shrugging off a drop in new factory orders that ate into more extensive gains earlier in the day.

But Microsoft (NASDAQ: MSFT  ) didn't join in the Dow's gains, falling more than 1% after regulators in the European Union imposed a fine of more than $730 million on the software giant. The fine is the latest in a string of decisions against Microsoft and comes amid allegations that the company failed to comply with the terms of its early 2009 settlement with regulators, as it didn't offer software on tens of millions of computers that should have given users a full suite of competing Internet browsers to choose from. Microsoft has paid billions in fines, but it continues to draw scrutiny regarding antitrust concerns over the way it handles its various software offerings.

Elsewhere, unmanned-aerial-vehicle specialist AeroVironment (NASDAQ: AVAV  ) plunged 11.4% after a poor earnings report last night. The company not only missed top- and bottom-line estimates by a wide margin, but also cut its guidance for 2013, blaming delays in government orders for the shortfall. As budget pressures increase, it's hard to see the Department of Defense getting any faster with its order process, so these problems could plague the industry for a long time to come.

Finally, Hovnanian (NYSE: HOV  ) fell more than 2% even after reporting a smaller-than-expected loss for its most recent quarter. Although rising contracts and backlogs led CEO Ara Hovnanian to predict that the company will become profitable this year, investors have already taken a lot of good news into account in bidding up the stock throughout the past year. Investors will have to see increasingly strong results from Hovnanian in order to justify further gains from current lofty share prices.

More on Microsoft
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