The markets inched forward on Wednesday as dealmakers digested the Federal Reserve's announcement that it would leave the benchmark rate at 2% and warned that inflation may accompany any future uptick in the economy. On the one hand, the current rates have provided cheap financing for deals, but at the same time, the downside has been that banks have tightened their lending standards so acquirers have had to become more creative when raising funds for proposed transactions. Overall, the Dow closed Wednesday up 4.40, or 0.04%, to 11,811.33, and the Nasdaq increased 32.98, or 1.39%, to 2,401.36.
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Oracle Corp. [ORCL] is a company that has had no trouble doing deals in the current economic climate. The software giant has made four acquisitions in 2008 despite the tightening credit markets, and those acquisitions are paying off as exemplified by Oracle's earnings announcement after the close of Wednesday trading that its fiscal fourth-quarter earnings rose nearly 27% to $2.04 billion, or 39 cents per share.
Meanwhile, shares of credit card company MasterCard Inc. [MA] closed up $9.42, or 3.36%, to $289.79 as it reached a $1.8 billion settlement with American Express Co. to settle claims related to a 2004 antitrust lawsuit. In 2004, New York-based American Express sued Visa Inc., MasterCard and eight of their member banks for imposing rules that had prohibited financial institutions from issuing credit cards through American Express. Prior to its March IPO, Visa reached a $2.25 billion settlement with American Express.
Finally, shares of St. Louis-based brewer Anheuser-Busch Cos. [BUD] closed up 63 cents, or 1.03%, to $61.76 as InBev SA chief executive Carlos Brito sent a third letter to his counterpart at the U.S. brewer, insisting the Belgian suitor has committed financing in place to complete the unsolicited $46 billion deal. - Gerald Magpily
