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Microsoft gains on stock buyback plan, higher dividends

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Microsoft gains on stock buyback plan, higher dividends

Shares of Microsoft Corporation (NASDAQ:MSFT) were up 0.39 percent after the company announced a $40 billion stock buyback plan and increasing its divided 22 percent. The world’s leading software maker wishes to reward investors as the company undergoes a shift in strategy and leadership.

Last month Microsoft CEO Steve Ballmer announced he would retire within the next year, helping to boost shares more than 7 percent in one day. Microsoft has gained more than 3.1 percent over the past month and nearly 19 percent year-to-date.

Ballmer’s announcement comes at a critical time for the maker of Windows, which recently acquired Nokia (NYSE:NOK) for $7.2 billion in an attempt to stay relevant in the smartphone and tablet markets. Earlier in the summer Microsoft reported dismal quarterly earnings, due largely to waning demand for PCs and poor tablet sales, forcing the software company to undertake a $900 million write down on its Surface tablets. Microsoft shipped 300,000 Surface tablets in the second quarter, representing only 15 percent of all Windows tablets.

Microsoft has introduced permanent price cuts of up to $150 for its Surface RT and Surface Pro tablets.

The deal to acquire Nokia boosts Microsoft’s potential in the smartphone market. However, the company will have significant challenges if it is to compete with rivals Samsung and Apple. Nokia rules the Middle Eastern mobile market, and is currently the world’s second-largest mobile phone maker with a global market share of 18 percent. Nokia shares jumped more than 1 percent to $6.30, having rallied more than 51 percent this year. Since September 2008, Nokia shares have fallen more than 70 percent.

In related news, shares of Apple Inc (NASDAQ:AAPL) ended a four-day losing streak after rallying more than 1.1 percent to $455.32. The maker of the iPhone and iPad has been under intense scrutiny after unveiling its cheaper iPhone 5C model last week.

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