Microsoft expected to report first annual sales dip

Microsoft is expected to report the first annual sales dip in its history this week.

But the firm's second quarter financial results, due on...

Microsoft is expected to report the first annual sales dip in its history this week.

But the firm's second quarter financial results, due on Thursday, are unlikely to affect investors because of renewed optimism in the technology sector, according to Reuters.

Last week, technology companies rallied on the US stock markets, triggered by strong financial results from computer chip makers Intel and Altera.

Intel's shares jumped 7.3% and Altera's shares rose 4.2% after reporting better than expected revenues and profits. The strong results also benefited the share price of Intel rival AMD by 8.7% and Hewlett-Packard by 4.5%.

Analysts expect Microsoft to ride the crest of the new wave of optimism supported by positive responses to the firm's new Bing online search service and forthcoming Windows 7 operating system and Office 2010 productivity suite.

Interest in Microsoft shares could also be boosted if the firm finally strikes an internet search and online advertising deal with Yahoo.

After months of intermittent negotiations, Yahoo board member Carl Icahn and others say the talks have intensified and a deal could be close.

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