Sector Snap: Exchange operators rise on May volume

Shares of exchange and trading platform operators mostly rose Tuesday after they reported May trading volume.

Analysts raised earnings estimates for CME Group Inc. based on its better-than-expected May results. The Chicago-based derivatives exchange operator said Tuesday that its average daily trading volume fell 15 percent last month compared with May 2008, but rose 17 percent from April 2009. About 10.7 million contracts traded daily last month.

Fox-Pitt Kelton analyst Edward Ditmire raised his expectations for CME Group's June trading volume after May's results topped his estimate. He also raised his second-quarter profit forecast to $3.23 per share, compared with his earlier estimate of $3.19 per share.

However, Ditmire said CME's volume increase could be partly offset by a shift to interest-rate contracts that carry lower rates per contract. Interest rate volume now makes up 42 percent of CME's trading volume, up from 37 percent in this year's first quarter and 35 percent in last year's fourth quarter, Ditmire said in a research note.

Ditmire maintained a $242 price target for CME Group's shares, which he noted are up 58 percent year-to-date, well above its U.S. exchange peers.

Meanwhile, BMO Capital Markets analyst Michael Vinciquerra raised his full-year earnings estimate on CME to $12.97 per share from $12.79 per share.

Shares of CME Group rose $7.06, or 2.1 percent, to $336.74 in afternoon trading Tuesday.

Elsewhere, IntercontinentalExchange Inc., which operates futures and over-the-counter markets, said its average daily trading volume rose 11 percent in May.

Vinciquerra left unchanged his earnings estimate for IntercontinentalExchange, writing in a research note that futures volumes and rates per contract were in line with projections.

Shares of Atlanta-based IntercontinentalExchange rose $4.97, or 4.5 percent, to $115.

Shares of Plantation, Fla.-based TradeStation Group Inc., which provides an electronic trading platform, rose 15 cents to $8.60 after the electronic trading platform provider reported daily average revenue trades rose 16 percent in May.

Vinciquerra said TradeStation's May results were "roughly in line with our expectations."