CA Shares Up 10 Percent

CA shares Tuesday rose more than 10 percent, closing up $1.63 at $17.61. The stock dropped almost 40 percent over the latter half of last week, following reports that federal agencies had opened preliminary inquiries into whether CA, based here, properly recognized revenue.

President and CEO Sanjay Kumar last week said the U.S. Attorney's Office and the Securities and Exchange Commission confirmed opening preliminary inquiries but did not disclose the topic to CA.

"I think anybody looking hard enough always can find something to pick on, but in the case of CA, they've been thoroughly scrutinized in the past, so I'd be very surprised if they find anything," said Jim Mendelson, managing director at Old Greenwich, CT-based investment firm SoundView Technology Group.

Bargain hunters may have driven the stock price up Tuesday, but shares will be hard-pressed to fully recover as long as the cloud of a federal inquiry looms over the enterprise software vendor, Mendelson said.

Solution providers this week said CA customers are not troubled by last week's developments.

"We've heard no concerns from customers. They're very satisfied with the technology," said Gregory Maisel, director of business strategy at IT PartsHouse, a solution provider in Frisco, Tex.

Kumar last week said CA had not been asked to provide any information or documents to investigators.