U.S. Stocks Lower on Exxon, MasterCard

123jump.com Staff
31 Jul, 2008
New York City

U.S. stocks traded lower after the release of weak U.S. economic growth estimate and lowered estimates of the previous years. The economy grew at 1.9% annual rate in the second quarter and growth rate for the first quarter was lowered to 0.9% from 1%. The economy shrank at 0.2% in the fourth quarter of 2007 compared to earlier estimate of a rise of 0.6%. In the earnings news, MasterCard reported a loss on settlement with American Express and Visa reported earnings rise of 41%.

[R]12:55PM New York – U.S. benchmark indexes traded lower after the economic growth projections were revised lower. MasterCard dropped 4% after it reported a loss from a settlement with American Express.[/R]

The U.S. economic growth for the second quarter was estimated at annual rate of 1.9% and was revised lower as far back in 2005 according to the latest data release by the Commerce Department.

First quarter growth rate was lowered to 0.9% from 1% and economy shrank in the fourth quarter of 2007. The revised estimate in the quarter suggested a decline in rate of 0.2% from the previous estimate of rise of 0.6%. While the U.S. economy is not in recession officially, but the monthly job losses in the last six months suggest a worsening labor market and weakening economy.

MasterCard Inc ((MA)) reported net income of $276 million, or $2.11 per diluted share, excluding a special item, and a net loss of $747 million, or $5.74 per diluted share, including the special item. The company took a one-time after-tax charge of $1.0 billion related to an antitrust litigation settlement with American Express.

The second largest payment processing company revenue in the quarter rose 25% to $1.2 billion and gross dollar volume processed increased 12.8% to $655 billion. Worldwide purchase volume in the quarter on a local currency basis increased 14% to $493 billion.

Exxon Mobil Corporation, the world's largest publicly traded oil company reported second quarter revenues increased 40% to $138.1 billion from $98.4 billion a year ago. Net income in the quarter rose 14% to $11.68 billion or $2.22 per share compared to net income of $10.26 billion or $1.83 per share, a year ago.

Exxon Mobil Corporation ((XOM)) in the last one year traded as high as $96.12 in October 2007 and as low as $77.55 in July 2008. Based on the yesterday’s closing price the company has a market cap of $430.83 billion.

CVS Caremark Corporation, a provider of prescriptions and related healthcare services and a drug retailer reported second quarter revenues increased 2% to $21.1 billion from $20.7 billion a year ago. Net income in the quarter increased 7% to $774.8 million or 53 cents per share compared to net income of $723.6 million or 47 cents per share, a year ago.

CVS Caremark Corporation ((CVS)) in the last one year traded as high as $44.29 in June 2008 and as low as $34.85 in July 2007. Based on the yesterday’s closing price the company has a market cap of $55.13 billion.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 9.02 or 0.07% to 13,376.81, Hang Seng index in Hong Kong increased 40.50 or 0.18% closed to 22,731.10. ASX 200 index in Australia increased 40.70 or 0.82% to close 4,977.40. The KL Composite index in Malaysia increased 3.15 or 0.27% closed to 1,163.09.

The Kospi Index in South Korea increased 16.97 or 1.08% to close at 1,594.67, SET index in Thailand closed higher 6.42 or 0.96% to 676.32 and JSE Index in Indonesia increased 25.82 or 1.13% to 2,304.51. The Sensex index in India increased 68.54 or 0.48% to 14,355.75.