MasterCard Up 10%

Elena
02 May, 2007
New York City

U.S. stocks opened higher on Wednesday, lifted by deal news in the media sector and better-than-expected corporate profits. Master Card surged 10% after reporting 70% earnings rise to $1.57 per share from 94 cents per share a year ago, beating estimates of $1.15 a share. Revenue climbed 24% on favorable currency exchanges and stronger use of its brand overseas.

[R]9:45AM U.S. markets opened higher, boosted by media stocks.[/R]
U.S. stocks opened higher on Wednesday, lifted by deal news in the media sector and better-than-expected corporate profits. The Dow Jones industrials crossed 13,200 for the first time after a strong reading on U.S. factory orders raised optimism about the economy. The Commerce Department said orders to U.S. factories jumped 3.1% in March, helped by strong demand for commercial aircraft, easily beating forecasts of 2% increase.

On the earnings news front, Master Card ((MA)) surged 10% after reporting 70% earnings rise to $1.57 per share from 94 cents per share a year ago, beating estimates of $1.15 a share. Revenue climbed 24% on favorable currency exchanges and stronger use of its brand overseas. Yum Brands Inc. ((YUM)) reported a 14% increase in Q1 earnings as its international operations turned in a tidy profit.

Real estate stocks were notable gainers in early trading, led by Jones Lang Lasalle ((JLL)) and CB Richard Ellis Group ((CBG)), rising 15% and 13%, respectively. CB Richard Ellis, the biggest U.S. commercial real estate brokerage, posted a lower quarterly profit ue to charges. Hiowever, excluding the charges, the company's earnings beat analyst estimates. Cablevision Systems Corp. ((CVC)) jumped 8% after the cable TV provider said it struck a $10.3 billion deal to be taken private by its controlling shareholders, the Dolan family.

In early trading, the Dow Jones industrial average rose 37.46, or 0.29%, to 12,173.60. The Standard & Poor's 500 index advanced 3.19, or 0.21%, to 1,489.49, and the Nasdaq composite index rose 5.44, or 0.21%, to 2,536.97. Bonds showed little movement, with the yield on the benchmark 10-year Treasury note unchanged at 4.64% from late Tuesday.


[R]9:30AM London equities gain Wednesday on BSkyB and Lonmin.[/R]
The UK market was higher on Wednesday. By mid-day, the benchmark FTSE 100 Index rallied 37.2, or 0.6%, to 6456.8.

Advancers

BSkyB, the satellite pay-TV company, jumped 6.8%. The shares rose the most in four years after the company posted a smaller-than-expected drop in third-quarter profit. Net income dipped 6% to 142 million pounds, or $284 million, beating analysts estimates of 132 million pounds.

Lonmin, the world third-largest platinum producer, rallied 6.4%. The company first-half loss narrowed to $3 million from $67 million a year earlier. Antofagasta, owner of copper mines in Chile, climbed 3%. Vedanta Resources, the largest copper producer in India, gained 2.2%. Xstrata, the world fourth-largest producer of the metal, advanced 2.1%.

William Morrison, the fourth-biggest U.K. food retailer, gained 1.4%. Reportedly, investors bought the stock late yesterday on speculation the company may soon receive a private-equity bid.

Liberty, the U.K. largest owner of shopping malls, rose 2.1% after Credit Suisse raised its recommendation for the shares to outperform from underperform.

Decliners

PartyGaming declined 7%. The world biggest Internet poker company announced that annual profit will miss analysts estimates significantly because of higher-than-forecast costs for signing up customers in the first quarter.

Retailer Home Retail shrugged off challenging conditions for consumers as it reported profit before tax goodwill and one-off items up 12% to 376.7 million pounds in the year ended March 3 2007. The company lost 1.3%.

Northgate says that due to the impact of the challenging market conditions in criminal justice and the group''s on-going investment in sales and marketing, underlying profits will be towards the lower end of management''s expectations. The software group also unveiled a 260 million pounds acquisition in Belgium. Northgate plunged 6.3%.


[R]9:15AM U.S. stock futures traded higher. Jobs data were the weakest in 4 years.[/R]
U.S. stock futures traded higher Wednesday, although a payroll data helped erase some of the earlier gains. The ADP national employment report said private employment gained 64,000 in April, the weakest job growth in four years.

The media sector was in the spotlight as Time Warner ((TWX)) reported earnings. The media giant said its Q1 profit slipped 18% to $1.20 billion, or 31 cents per share, from $1.46 billion, or 32 cents per share a year ago, but beat expectations as revenue increased by 9%. Time Warner also raised its full-year profit outlook, saying it now expected to earn $1.05 per share. Among other companies releasing earnings before the opening bell, Chipotle Mexican Grill ((CMG)) rallied 3.4% in pre-open after the restaurant owner reported a stronger-than-forecast 56% profit rise.

Deal speculation in the sector also provided support. Dow Jones ((DJ)) continued to advance amid speculations that News Corp. ((NWS)) will raise its bid or that a rival suitor may emerge. In other deal news, Citigroup ((C)) agreed to buy financial services outsourcing company Bisys Group ((BSG)) for $1.45 billion in cash. S&P 500 futures rose 1.70 points to 1,494.40 and Nasdaq 100 futures inched up 0.50 of a point to 1,886.25. Dow industrial futures gained 17 points to 13,195.


[R]9:00AM Asian markets end higher on Wednesday, as Japan advanced on auto stocks.[/R]
Asian markets advanced on Wednesday. In Japan, the 225-issue Nikkei Average finished 0.69% to 17,394.92. Shares of Mazda rose 3.6%, gaining for a second day, after the company reported earlier in the week that group net profit jumped 24% in the January-to-March quarter, helped by stronger sales of its new sport-utility vehicle. Bridgestone rose 2.8% after the company reported a 3.6% rise in first-quarter net profit.

Not all auto makers ended higher. Nissan Motor declined 1% after the company announced its U.S. sales for the Nissan and Infiniti brands dropped 18% on an unadjusted basis in April from a year earlier. Toyota Motor also dipped 0.3% after its U.S. sales lost 4.3% in April from the year earlier, while Honda Motor was off 0.7% after the company said its U.S. subsidiary saw total sales of cars and trucks fall 9.1%.

Hong Kong Hang Seng Index ended 0.3% higher at 20,388.49. HSBC Holdings rose 0.8% after Dubai International Capital said it had bought a substantial stake and thus marked the second major investment in the British Bank by a Middle Eastern interest in recent weeks. Cheung Kong Holding advanced 1.6%, following broad gains in property developers, after local real estate bodies announced total sales turnover in April was likely the strongest in a year.

Australian S&P/ASX 200 settled up 1.5% to 6,237.70. BHP Billiton and other natural resource shares led the advancers after copper prices reached their highest level in a week. BHP Billiton gained 1.9% after July copper futures advanced 2.2% in New York trading Tuesday, on worries a labor dispute in Peru could disrupt the metals production.

South Korean Kospi index added 0.72% to 1,553.30. The Singapore Straits Times Index jumped 1.7% to close at 3,417.81, while Taiwan Weighted Price Index ended up 0.35% at 7,903.04.


[R]8:30AM News Corp. bid $5 billion for Dow Jones .[/R]
Rupert Murdoch’s News Corp. ((NWS)) launched a surprise bid for Dow Jones & Co. ((DJ)) valued at $5 billion, or $60 a share in cash, or a combination of cash and stock. The deal represents roughly 67% above the recent market value of Dow Jones, a massive premium at a time when most newspaper companies are losing readers and advertisers to the Internet.

The offer from News Corp. is expected to face obstacles. Dow Jones''s controlling shareholders, the Bancroft family, who own 24.7% of shares outstanding but hold 64.2% of the voting power, said they would block it. Dow Jones said late Tuesday that the Bancroft family said they would vote shares representing just over 50% of the company''s voting power against the deal. The shares shot up $19.87, or 54.7% in very heavy volume on the NYSE. Shares of News Corp. rose 1.2% in pre-market trading, while Dow Jones gained 0.5%.


[R]6:30AM European markets were higher Wednesday on strong media sector.[/R]
European markets advanced in early trade on Wednesday. By mid morning, Frankfurt Xetra Dax was 0.5% higher at 7,446.05, the CAC 40 in Paris added 0.5% to 5,989.09, and London FTSE 100 climbed 0.8% to 6,471.8. National benchmarks increased in all 16 western European markets that were open except for Sweden and Austria.

Advancers

London-listed BSkyB, which is 39% owned by News Corp, advanced 5.5% after posting better-than-expected customer growth in its third quarter. M6, the French commercial television broadcaster, gained 1% after reporting a 9.7 % increase in first-quarter sales. Other companies in the sector also gained including, Dutch publisher Wolters Kluwer rose 2.9%, while French peer Lagardere added 2.4%.

Novo Nordisk, the Danish drugs company, advanced 4.5% after reporting a better-than-expected 24% rise in first-quarter operating profit on strong growth in its European and North American markets. German household goods maker Henkel advanced 3.3% after it stated full-year sales growth would be at the upper end of estimates

Decliners

More potential deal news were at the center of attention on the stock exchanges. Shares of NYSE Euronext declined 3.5% after it disclosed in a filing that it has entered into a $3 billion syndicated revolving credit facility, which has prompted at speculation that it may gate-crash Deutsche Boerse agreed $2.8 billion acquisition of the International Securities Exchange. Deutsche Boerse shares declined 4.2%.

TeliaSonera AB fell 4.6%. The Swedish government announced it will sell a stake valued at about $2.9 billion in the biggest Nordic phone company to institutional investors as part of a plan to cede state holdings and reduce debt. Shire dropped 1%. The U.K. third-largest drugmaker will sell $1 billion in convertible bonds to fund the purchase of New River Pharmaceuticals.

Oil and precious metals

Crude oil advanced from a seven-day low on the expectation U.S. gasoline stockpiles declined last week as refiners shut units for repairs. Crude oil for June delivery rose to 27 cents, or 0.4%, to $64.67 in after-hours electronic trading on the New York Mercantile Exchange. Brent crude oil for June settlement rose to 36 cents, or 0.5%, to $67.36 a barrel on London ICE Futures exchange.

Gold was little changed in Asia as investors bet the sell-off yesterday in the precious metal as the dollar rallied was overdone. Silver gained. Gold for immediate delivery rose to $1.95, or 0.3%, to $675.40 an ounce. Silver for immediate delivery gained 3 cents, or 0.2%, to $13.28 an ounce.

Currencies

The dollar was higher against other major currencies in European trading Wednesday morning. The euro traded at $1.3578, down from $1.3620 late Tuesday in New York. The British pound traded at $1.9933, down from $1.9996. The dollar fetched 120.09 Japanese yen, up from 119.72.