MasterCard Rises 5%, Monsanto Falls 6%

123jump.com Staff
25 Jun, 2008
New York City

U.S. stocks maintained upward bias in the morning ahead of rate decision from the Fed this afternoon. MasterCard agreed to pay between $1 billion and $1.8 billion to American Express to settle its claims. Monssanto Company fell 5% after it reported third quarter earnings increase of 42% and offered annual earnings outlook that disappointed shareholders.

[R]11:30AM New York – MasterCard surges after a settlement with American Express.[/R]

Stocks on the Movers

MasterCard International surged after it reached a settlement with American Express and agreed to pay as much as $1.8 billion in the next twelve monthly installments.

MasterCard agreed to pay twelve quarterly payments beginning in the third quarter of 2008, of $150 million, contingent upon the performance of American Express''s U.S. Global Network Services business. Total payments are expected to be $1 billion and may reach as high as $1.8 billion.

MasterCard will take a charge of the settlement in the current quarter. MasterCard ((MA)) rose $14.24 to $295.63.

Monsanto Company ((MON)) fell $6.63 to $129.10 after it reported third quarter profit increase of 42% and sales rise of 26% and offered earnings outlook of $3.40 per share from its previous guidance between $3.38 and $3.48 per share. Investors sold stock as many had hoped for higher guidance.

North American Markets indexes

Dow Jones Industrial Average gained 26.3 or 0.22% to 11,833, S&P 500 rose 8.26 or 0.63% to 1,322.55.

Of the 30 stocks in Dow Jones Industrial Average 23 stocks gained, 6 declined and 1 remained unchanged.

Boeing led the decliners in the Dow Jones Industrial Average with a loss of 4.01% to $71.79 followed by losses in United Tech of 1.23% to $67.32, in Alcoa of 1.06% to $36.50, in Merck & Co of 0.84% to $36.72 and in Caterpillar of 0.50% to $76.26.

JP Morgan Chase led the gainers on the Dow Jones index with a rise of 2.76% to $38.76 followed by increases in Citigroup of 2.60% to $19.34, in Bank of America 2.55% to $27.30, in AT&T 2.45% to $ 35.11 and in Home Depot 1.90% to $25.79.

Of the stocks in S&P 500 index, 404 increased 92 declined and 4 remained unchanged.

Rockwell Automat led the decliners in the S&P 500 index with a loss of 11.86% to $46.00 followed by in losses in Massey Energy of 4.78% to $86.75, in Precision Castparts of 4.63% to $103.99, in Apollo Group of 4.45% to $50.48 and in Monsanto of 4.26% to $130.

Jabil Circuit led the gainers in the S&P 500 index with a rise of 14.93% to $16.47 followed by increases in Dean Foods of 11.31% to $20.47, in Fifth Third of 8.25% to $11.00, in Zion Bancorp of 7.20% to $7.20 and in Fannie of 5.78% to $23.95.

The following remained unchanged, Safeco, Public Service Enterprise Group, Eli Lillly & Co and Danaher.

Barclays Raises $9 billion

Barclays finalized its capital offering plan after denying for months that it needs additional capital. Barclays will raise capital from sovereign funds of Qatar and Singapore and Sumitomo Mitsui Banking Corporation and China Development Bank.

Barclays raise approximately £4.5 billion through the issue of 1,576 million and will maintain its current interim cash dividend at 11.5 pence per share.

Qatar Investment Authority and a partnership with the Singapore based Temasek will invest £533 million and SMBC has agreed to invest £500 million and China Development Bank has agreed to invest up to £136 million.

As at 31 December 2007, Barclays tier one capital ratio was 7.6% and its equity tier one ratio was 5.1% based on a Basel II standard against long term target levels of 7.25% and 5.25%, respectively. The company estimates on a pro forma basis Barclays would have reported a tier one ratio of 8.8% and an equity tier one ratio of 6.3% as at 31 December 2007 taking into account the offering.

Barclays in New York trading rose $1.53 to $26.24 and in London trading increased 21 pence to £3.21.

Asian Markets Review

In Tokyo Nikkei 225 Index closed lower 19.64 or 0.14% to 13,829.92, in Hong Kong Hang Seng index increased 179.14 or 0.80% closed to 22,635.16. In Australia ASX 200 index lower 52.20 or 0.99% to close 5,237.80. In Malaysia KL Composite index increased 8.83 or 0.74% closed to 1,209.11.

In South Korea Kospi Index increased 6.95 or 0.41% to close at 1,717.79, in Thailand SET index closed higher 14.67 or 1.92% to 778.42 and Indonesia JSE Index edged decreased 24.02 or 1.02% to 2,341.36. Sensex index in India increased 113.49 or 0.80% to 14,220.07.

Earnings Review

General Mills, Inc, the food and breakfast cereal maker reported fourth quarter sales increased 13% to $3.47 billion from $3.06 billion a year ago. Net income in the quarter decreased 17.35% to $185.2 million or 53 cents per diluted share compared to net income of $224.1 million or 62 cents per share, a year ago.

For the fiscal year ended May 25, 2008, General Mills net sales grew 10% to $13.7 billion. Net earnings grew 13% to $1.3 billion including non-cash net gains from mark-to-market valuation of certain commodity positions and a favorable ruling related to a tax contingency.

Diluted earnings per share totaled $3.71 including $0.19 from the commodity and tax items. Excluding these items, earnings per share would have totaled $3.52 for the year, up 11% from reported earnings of $3.18 per share a year ago.

General Mills, Inc ((GIS)) in the last one year traded as high as $63.91 in June 2008 and as low as $51.00 in January 2008. Based on the yesterday’s closing price the company has a market cap of $20.91 billion.

Monsanto Company, a provider of agricultural products for farmers reported third quarter sales increased 26% to $3.6 billion from $2.8 billion a year ago. Net income in the quarter increased 42% to $811 million or $1.45 per diluted share compared to net income of $570 million or $1.03 per share, a year ago.

Monsanto Company ((MON)) in the last one year traded as high as $145.80 in June 2008 and as low as $58.50 in August 2007. Based on the yesterday’s closing price the company has a market cap of $74.52 billion.

3Com Corporation, the network equipment maker said fourth quarter revenues rose 3% to $321.3 million from $310.9 million a year ago. Net loss in the quarter was $166.7 million or 41 cents per diluted share compared to net loss of $66.2 million or 17 cents per share, a year ago. For the year, 3Com''s loss widened to $228.8 million from $88.6 million. Revenue rose 2% to $1.29 billion from $1.27 billion.

3Com Corporation ((COMS)) in the last one year traded as high as $5.11 in September 2007 and as low as $1.76 in March 2008. Based on the yesterday’s closing price the company has a market cap of $955.54 million.