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Oracle (NASDAQ: ORCL) announced in April the acquisition of Sun Microsystems (NASDAQ: JAVA) for $9.50. Sun Microsystems closed at $9.01. Oracle issued the following statement, attributable to Dan Wall, counsel to Oracle. "We've had a very good dialogue with the Department of Justice and we were almost able to resolve everything before the Second Request deadline. All that's left is one narrow issue about the way rights to Java are licensed that is never going to get in the way of the deal. I full expect that the investigation will end soon and not delay the closing of the deal this summer." JAVA August option implied volatility of 22 is near its 13-week average, according to Track Data, suggesting non-directional price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

TheStreet.com's Jim Cramer says Nasdaq is so strong it's downright eerie.

Tech can't be fought here. Because people are partying like it is 1999, when firms used $400 price targets for Qualcomm (NASDAQ: QCOM) (Cramer's Take) and Broadcom (NASDAQ: BRCM) (Cramer's Take) had all the wireless network answers and Apple (NASDAQ: AAPL) (Cramer's Take) had the audacity to think that it could control the music business.

We've seen it going on since the market bottom, the endless driving of tech higher and higher. We get the wireless bottom, thanks Nokia (NYSE: NOK) (Cramer's Take); the personal computer bottom, thanks Intel (NASDAQ: INTC) (Cramer's Take); the gadget bottom, thanks Taiwan Semiconductor (NYSE: TSM) (Cramer's Take); the TV bottom, thanks Corning (NYSE: GLW) (Cramer's Take) and Best Buy (NYSE: BBY) (Cramer's Take); the software bottom, thanks to Oracle (NASDAQ: ORCL) (Cramer's Take) buying Sun Microsystems (NASDAQ: JAVA) (Cramer's Take) for its software and IBM (NYSE: IBM) (Cramer's Take) celebrating its software on its quarter; and the dot-com bottom represented by great earnings from Google (NASDAQ: GOOG) (Cramer's Take) and decent numbers from rejuvenated management teams at Yahoo! (NASDAQ: YHOO) (Cramer's Take) and eBay (NASDAQ: EBAY) (Cramer's Take).

TheStreet.com's Jim Cramer says the good developments in the space got lost yesterday amid all the hubbub over banks.

We are so focused on the endless one-time gains at Bank of America (NYSE: BAC) (Cramer's Take) that made the quarter look better than it should that we forgot about some other obvious positives that were occurring right before our eyes. I am talking about tech, and tech mergers and tech earnings.

No, I am not minimizing the problems of the banks -- did anyone think that Ken Lewis would choose to show a loss if he had a chance, as the bears seemed to urge? I am saying that when you have both Oracle (NASDAQ: ORCL) (Cramer's Take) and IBM (NYSE: IBM) (Cramer's Take) interested in something that we thought was worth very little just a few weeks ago -- Sun Microsystems (NASDAQ: JAVA) (Cramer's Take) -- when you have Broadcom (NASDAQ: BRCM) (Cramer's Take) interested in buying Emulex (NYSE: ELX) (Cramer's Take) -- another left-for-dead tech company -- and when you have Texas Instruments (NYSE: TXN) (Cramer's Take) saying inventories are lean, mostly because of Asian demand, you are not getting a picture of despair.

Back in early 2007, KKR Private Equity Investors -- along with Citigroup (NYSE: C) -- invested $700 million in Sun Microsystems (NASDAQ: JAVA). The investment structure was a convertible senior note (both firms split the investment).

And, just like many other private equity deals, KKR wrote down the investment -- by about $167 million. This was as of last year.

Well, in light of Oracle's (NASDAQ: ORCL) announced $7.4 billion buyout of Sun yesterday, there is a nice surprise for KKR. You see, according to the note agreement, KKR is entitled to get its investment repaid. In fact, this also includes payment of accrued interest, according to Reuters.

This was one of those "sell-the-news" trading days that many of the bears were expecting over the last two weeks. In fact, some bears might finally feel vindicated after weeks of being slapped silly. The European markets started lower and the U.S. followed suit. Credit concerns for banks getting worse ahead and what Uncle Sam will do with his stakes in the banks was just a part of it.

Here are today's unofficial closing bell levels:

Dow 7,841.73 -289.60 (-3.56%)
S&P 500 832.39 -37.21 (-4.28%)
Nasdaq 1,608.21 -64.86 (-3.88%)

Top 10 Analyst Calls

Today's announcement that Oracle (NASDAQ: ORCL) would acquire Sun Microsystems (NASDAQ: JAVA) for $7.4 billion worth of cash left me scratching my head. The rationale? Something that Oracle's president calls non-GAAP earnings. Does this mean that Oracle's first acquisition of a hardware company makes strategic sense? I don't know.

I am not sure what non-GAAP earnings are, but it sounds like it is a special kind of accounting meant to justify a deal that would not look good on a GAAP basis. Safra Catz, Oracle's president, estimates that on a non-GAAP basis, the deal will add $1.5 billion in "non-GAAP operating profit" in the first year and $2 billion to that new measure in future years.

Sun Microsystems (NASDAQ: JAVA) will be acquired by Oracle (NASDAQ: ORCL) for $9.50. JAVA May call option implied volatility of 118 was above its 26-week average of 89, according to Track Data, suggesting larger price movement.

ORCL is recently down 80 cents to $18.20 in pre-open trading. ORCL April option implied volatility of 49 is near its 26-week average of 52, according to Track Data, suggesting non-directional movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

Four weeks in a row of gains were met with at least the first day of the week having sellers win over buyers. The good news is that the market came back at the end of the day. We might have closed up if we had another hour of trading on the clock.

Geithner's comments about running out management and boards of directors at banks which need capital did not help, nor did an influential banking analyst coming out with very negative coverage of the sector at a new firm. Here were today's closing bell levels:

Dow 7,975.85 -41.74 (-0.52%)
S&P 500 835.48 -7.02 (-0.83%)
Nasdaq 1,606.71 -15.16 (-0.93%)

Top Analyst Upgrades
Top Analyst Downgrades

It seemed like a done deal. But in the high-stakes M&A game, things can easily fall to pieces.

Just look at IBM (NYSE: IBM). Over the weekend, the firm withdrew its $7 billion bid for Sun Microsystems (NASDAQ: JAVA). It's yet another heart-breaker for beleaguered Sun shareholders.

Actually, according to the Wall Street Journal [a paid publication], it looks like IBM was the only company interested in a deal. So, even though Sun had little negotiating leverage, it acted as though it had a lot – that is, by holding out for a higher valuation and firmer deal protections (such as "change of control" clauses that provided Sun execs with lush payouts). Well, I guess IBM didn't need Sun that badly or if anything, was certainly willing to play hardball.

For the past few weeks, investors have "partied like its 1999" as in the heady days of the tech bubble and not the song by Prince.

They have taken a "What me worry?" attitude that would make Alfred E. Neuman, the fictional mascot of "Mad" magazine proud, sending the major indexes soaring after data showed some small signs of improvement, even though the economy lost 663,000 jobs in March.

IBM (NYSE: IBM) has walked out on its deal to buy Sun Microsystems (NASDAQ: JAVA) -- or could just be using hardball negotiations to have its way on the price it is willing to pay. Word is that Sun's board is divided over the value of IBM's offer.

In either case, the value of Sun's stock is likely to go back to where it traded before the IBM buy-out rumor hit the street. That would be under $5. The stock closed at $8.49 on Friday.

According to Reuters, "The collapse of the talks, if final, would come as a surprise to Wall Street, which had seen the deal as a means for Sun's survival, as well as a way for IBM to compete more effectively against rivals like Hewlett-Packard." It would also leave Sun, one of the worst-managed tech companies in America, to fend for itself in a recession that has cut sharply into IT spending.

Sun has survived the last three years through cost cutting. In a good quarter over that period it has lost a modest amount of money. Since there are several larger companies competing with it for market share in the global server business, Sun's losses could grow considerably if another suitor does not come along. That is not likely. The only other company which could use Sun as a way to buy market share is Dell (NASDAQ: DELL), and it has not had any appetite for large acquisitions.

Douglas A. McIntyre is an editor at 24/7 Wall St.

In any normal universe, the market would have collapsed on news that unemployment went to 8.5%. To make matters worse, it is obviously going much higher.

The market shrugged all of that off and went nowhere. Most financial stocks were up. A number of tech and telecom stocks were down. Whatever bump the G-20 gave the market seems to have dissipated in a day.

The numbers:

DJIA:Dow 8,017.59 +39.51 (0.50%)
S&P 500 842.47 +8.09 (0.97%)
Nasdaq 1,621.87 +19.24 (1.20%)

Analyst upgrades
Analyst downgrades

IBM (NYSE: IBM) cut its offer for Sun (NASDAQ: JAVA) from about $11 a share to just above $9. As a concession, IBM said that it would do everything it could to get regulatory approval. The situation may not be that simple. IBM may want to wait for Sun's earnings and, if they are weak, drop the price of the offer again.

The way that the deal is likely to play out is a fine example of what happens when a very strong company is in the process of taking over a very weak one.

Today saw more bank losses. Forced closure more likely at auto-makers. Political seizure over free market enterprise. And a market eager to find an excuse to sell off. That sums it up. The good news is that everything went on sale, all over again and even more. Here were today's unofficial closing bell levels:

Dow 7,522.02 -254.16 (-3.27%)
S&P 500 787.53 -28.41 (-3.48%)
Nasdaq 1,501.80 -43.40 (-2.81%)

Top Analyst Upgrades
Top Analyst Downgrades

Sun Microsystems (NASDAQ: JAVA) closed at $7.85. The Wall Street Journal reported on March 18 that IBM (NYSE: IBM) is likely to pay between $10 and $11 per share for JAVA. JAVA April option implied volatility is at 127, July is at 73. JAVA option implied volatility over the last 26-weeks is 79 according to Track Data, suggesting larger near term price movement.

IBM closed at $97.95. IBM is expected to report Q1 EPS on April 20. April and July option implied volatility of 40 is below its 26-week average of 44, according to Track Data, suggesting decreasing price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.