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Market Update : 
MasterCard up 15% on Strong Profit
Author: Elena Todorova
123jump.com
Last Update: 10:08 AM EST November 01 2006


 
9:45AM Market opened up on MasterCard earnings and jobs forecast.
Better-than-expected earnings from MasterCard Inc. and an upbeat forecast for private-sector employment in October generated positive sentiment in early Wednesday trading. ADP-Macroeconomic Advisers said it anticipates a 128,000 more private-sector jobs when the Labor Department reports payroll figures Friday. Deal talks about a combination of pharmacy benefits manager Caremark Rx Inc. (CMS) and drugstore chain CVS Corp. (CVS) also contributed to the upside move after two lackluster sessions. A deal is likely to be worth more than $21 billion.

MasterCard Inc. (MA), owner of the nation''s second-largest credit card brand, reported 82% profit jump in Q3, due to an improved revenue and a higher number of purchases worldwide. The company earned $1.42 per share, up from 79 cents a share, a year earlier when MasterCard was a private entity owned by the nation''s largest banks. Revenue rose 13.9% to $902 million from $791.6 million a year ago. The quarterly results exceeded expectations of $1.07 in earnings per share on $871.2 million in revenue. Company's shares surged 16%.

In early trading, the gold sector showed significant strength as the price of gold climbed back. Health insurance stocks also posted some early strength, with Cigna (CI) helping to lead the sector higher, up 5.9% after reporting strong Q3 earnings and forecasting full year earnings above analyst estimates. In early trading, the Dow Jones industrial average rose 35.38, or 0.29%, to 12,117.31. The Standard & Poor's 500 index rose 3.58, or 0.26%, to 1,381.52, and the Nasdaq composite index rose 6.51, or 0.28%, to 2,373.22. Bonds were flat, with the yield on the 10-year Treasury note at 4.61%.


9:30AM The FTSE 100 advances by lunchtine Wednesday on miners.
The FTSE 100 in London extended its early gains to trade 22 points, or 0.4%, higher at 6,151.2.

Advancers

Cairn Energy unveiled plans to raise about $1.8 billion from the sale of 30.5% of its Indian operations. The proceeds will be used to fund ongoing operations but some will also be returned to shareholders. The oil exploration company rose 1.4%.

Xstrata rose 2.8% while Lonmin added 2.4%. BHP Billiton was 2.1% higher while Rio Tinto rose 1.4% with Vedanta Resources up 0.3%.

St James Place Capital gained 4.3% after the wealth manager said total new business rose 58% in the first nine months of the year compared to the same period last year.

Among the mid-caps, the tour operator MyTravel rose 0.3% after it confirmed its expectations to return to profit this year despite a 9.5% fall in winter holiday bookings.

Decliners

Tate & Lyle fell 1.2% as the sugar and sweetner maker cautioned that profit growth in the second half was likely to be lower than in the first six months of the year due to the impact of EU sugar reform and higher European cereal prices.

International Power announced the acquisition of a portfolio of wind farms in Germany and France with an enterprise value of 379 million pounds from Christofferson Robb & Co. International Power dipped 0.7%.

Morgan Stanley downgraded Smirnoff-owner Diageo to equal-weight as part of a wider note on the drinks sector, arguing that the potential for any upgrades are limited relative to peers in the sector. Diageo lost 0.15%.

Other news

Strong domestic demand helped the UK manufacturing sector deliver its fifteenth successive month of expansion, a trend that has encouraged producers to continue raising prices at the factory gate, a report released on Wednesday showed. The latest survey produced by the Chartered Institute of Purchasing and Supply and the Royal Bank of Scotland showed its index of manufacturing activity at 53.7 in October.


9:00AM Stock futures turned higher on employment data.
U.S. stock market futures turned higher after a survey report showed that the U.S. economy added about 128,000 private-sector jobs in October, a modest rebound in employment, according to the monthly ADP employment report released Wednesday. Automakers are also expected to report higher October U.S. sales compared to the same month a year ago.

On the earnings news front, Time Warner Inc. (TWX), the world''s largest media conglomerate, posted sharply higher Q3 earnings of 57 cents a share, up from 18 cents last year due to several asset sales and adjustments related to its deal to acquire cable systems from Adelphia. Revenues rose 7% to $10.9 billion from $10.2 billion. However, profit and revenue came in slightly below estimates. Time Warner held to its 2006 outlook. The stock dropped 1.45% in pre-market trading. Burger King Holdings Inc. (BKC), the world''s second-largest burger chain, reported Q1 earnings jump of 82% to 30 cents per share from 19 cents per share a year ago on sales increase. Revenue rose 8% to $546 million. Quarterly results beat expectations of a profit of 26 cents per share on revenue of $538.1 million. Insurer Cigna (CI) reported a 15% profit increase and lifted its 2006 earnings outlook.

In merger-and-acquisition news, CVS (CVS), the second largest drugstore chain in the U.S., confirmed that it is in merger talks with Caremark Rx (CMS), a leading pharmacy benefits manager. S&P 500 futures were up 3.70 points, above fair value. Dow Jones industrial average futures rose 36 points, and Nasdaq 100 futures were up 6.25 points.




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Market data: BATS Exchange. Inc.

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