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McClatchy-Tribune  06/24/2014 10:43 PM ET
Daily Wrap: Analysts pan Monsanto's Swiss adventure [St. Louis Post-Dispatch :: ]

June 24--TODAY'S INDEXES -- Dow industrials 16,818.13 -- 119.13

S&P 500 1949.98 -- 12.63

Nasdaq 4350.36 -- 18.32

ANALYSTS' INSIGHTS: A lot of people are buzzing about the merger talks that apparently took place -- but are now off -- between Monsanto and Swiss rival Syngenta. Some analysts who follow the companies, however, don't think a deal would have worked very well. For one thing, it would raise red flags for regulators. "Antitrust would be a problem, mainly in the seeds business where the two companies would become extremely dominant in certain areas like U.S. corn," Patrick Rafaisz, an analyst at Bank Vontobel, told Bloomberg. Chris Kapsch, of Topeka Capital Markets, doesn't even buy the business case for the merger. "Notwithstanding positive tax implications," he writes in a research note, "we do not agree with the strategic rationale that may have been behind such a move by MON. To the contrary, acquiring a predominantly crop protection chemicals franchise in Syngenta would likely have diluted MON's multiple, in our view."

LEMON PROBE: CarMax shares fell 3.5 percent after Sen. Charles Schumer, D-N.Y., asked the Federal Trade Commission to investigate whether used-car dealers are misleading consumers about safety recalls.

DRUG-INDUCED EUPHORIA: Vertex Pharmaceuticals surged 40 percent after a study said a combination of two of the company's drugs shows promise for treating cystic fibrosis.

FEELING CHIPPER: Chipmaker Micron Technology advanced 4 percent after beating analysts' third-quarter earnings estimates.

SCHOOL DOWNGRADED: Standard & Poor's lowered its credit rating for the unaccredited Riverview Gardens School District to BBB from A-plus. S&P analyst John Sauter cited "significant budget pressure stemming primarily from the enforcement of the state's unaccredited school district transfer legislation (beginning in fiscal 2014), which is threatening the district's long-term financial viability." S&P also has a negative outlook on the district's debt.

LOCAL INDEX: The Bloomberg St. Louis Index fell nearly 1 percent, a bit more than the broader market.

STL STOCKS GAINERS LOSERS

First Clover Leaf 1.3% Arch Coal -4.7%

Mallinckrodt 0.9% SunEdison -3.7%

Ameren 0.4% Stereotaxis -3.7%

LOCAL GAINER: Ameren edged higher after its Illinois utility subsidiary priced $250 million of 30-year bonds at 4.3 percent. The money will be used to repay short-term debt.

THE DAY AHEAD: Analysts expect Monsanto to report a third-quarter profit of $1.55 a share, down from $1.66 a year ago, but the company has exceeded forecasts for two quarters in a row. ... The nation's first-quarter gross domestic product will be revised, probably downward. Forecasters think the economy shrank at a 1.8 percent rate in the quarter, down from the government's previous estimate of negative 1.0 percent.

David Nicklaus is business columnist at the St. Louis Post-Dispatch. Subscribe to his Facebook page or follow him on Twitter @dnickbiz.

 

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