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Market Update

Stocks in the News: Tandy

Microsoft's partnership with Tandy doesn't mean RadioShack is going to start knocking down stores any time soon.

What does a retailer do when it has growing demand for its goods both in its stores and on the Internet? It hedges its bets.

Actually, things aren't quite that simple for Tandy Corp (TAN) and its RadioShack stores, which sell consumer electronics. Tandy recently announced an e-tailing venture with Microsoft (MSFT) that will give the firm $100 million to invest in its online venture, Radioshack.com. The deal indicates Tandy recognizes the need to expand its Internet presence because the advent of online shopping has made competition increasingly cutthroat.

Tandy's shares hit a 52-week high yesterday of $72 on the news before paring gains to close at $69 3/8, up 4 3/16.

Tandy can't ignore the threat of computer e-tailers like egghead.com  that have practically driven some traditional bricks-and-mortar rivals like CompUSA (CPU) into the ground.

There are few signs, however, that the company is prepared to abandon its retail outlets, which posted an 11% same-store sales jump in October, the 10th straight month of double-digit increases. But Microsoft's backing can help RadioShack turn its well-known brand and 7,000 stores into a sizable online presence.