"The settlement rumors are unfounded," said Justice Department spokesperson Gina Talamona.
Shares of Microsoft closed up 2.06 to 98.69 following a report by CNBC of rumors that the software giant and the Justice Department were close to a settlement.
Microsoft declined to comment on the rumors.
"We do not comment on rumors or the performance of our stock," said Microsoft spokesperson Tom Pilla.
Bob Brammer, spokesperson for the Iowa attorney general's office, had a similar response. "I'm sorry, but we cannot comment on the rumors," he said.
Both sides met in Chicago yesterday for the third Monday in a row, according to reports. Judge Richard Posner, who heads the U.S. Court Appeals for the Seventh Circuit, is mediating the settlement talks between the government and Microsoft.
The Justice Department and 19 states last week delivered their proposed conclusions of law as scheduled by U.S. District Judge Thomas Penfield Jackson. The judge is expected to base his conclusions of law, essentially his verdict, on the government's document.
Following some oral arguments tentatively scheduled for February, Jackson would then draft his ruling, which is expected by March.