Microsoft shares hit lowest point since 1998

Shares of the Redmond, Wash.-based software giant hit $18.74 before rebounding to $19.60 in afternoon trading. The previous 52-week low was $20.28 compared to an annual high of $36.72.

Jefferies & Co. analyst Katherine Egbert kept a "Buy" rating on shares but lowered her target price for the stock to $28 from $30. She lowered her revenue estimate to $17 billion from $17.5 billion and earnings per share to 52 cents from 53 cents.

The lowered expectations came as the latest sign that the economic downturn is hitting software makers along with the rest of the technology sector.

Oppenheimer & Co. analyst Brad Reback noted in a message to clients that Microsoft is exposed to weakening demand both from businesses and consumers. He also cut the his earnings and revenue projections for 2009.

Reback cut estimates on a several software companies, writing in a note to investors, "Between the negative commentary out of Cisco last week and Intel last night, we are increasingly worried" about slowing demand at Microsoft as well as Oracle Corp. and Adobe Systems Inc.

Intel slashed its fourth-quarter sales guidance by more than $1 billion Wednesday after the close of trading. And Cisco said last week that sales fell off sharply in October.