Discover Card Services Inc

Discover Financial Services, the fourth-biggest U.S. credit card company, settled an antitrust suit in which it sought $18 billion from larger rivals Visa Inc. and MasterCard Inc. for blocking banks from issuing its cards. The accord came as trial was to begin Tuesday in Manhattan federal court. Terms weren't disclosed, but UBS analyst Adam Frisch in New York wrote that "industry sources" said the case was settled for $2.

Morgan Stanley outlined its long-expected plans to spin off its Discover operation, saying it would distribute shares in the fourth-largest debit and credit card network to the investment bank's shareholders. Morgan Stanley had announced Dec. 19 that it would spin off Discover sometime in the next year. The move comes as rival Visa International plans to go public this year, following in the footsteps of MasterCard Inc.'s flotation in May 2006.

Morgan Stanley Inc., the second-biggest investment house on Wall Street, said Tuesday that it would shed its Discover credit card business. Speculation has swirled for years that Morgan Stanley would split off the No. 4 credit card brand to focus on its prime investment banking, brokerage and trading operations. Shareholders have urged Morgan Stanley to unload Discover because it has steadily been losing ground in a crowded field of larger competitors.

Discover Financial Services, the Riverwoods, Ill., credit card company, said it received a $1.2-billion injection of cash by selling preferred stock and a warrant for common stock to the U.S. Treasury.

Discover Financial Services Inc. said it would team with Wal-Mart Stores Inc. to issue a credit card to customers of the retail chain. The U.S. Supreme Court let stand in October an antitrust ruling that forced Visa International and MasterCard Inc. to stop preventing the banks that own them from issuing rival cards. That made it possible for Morgan Stanley subsidiary Discover and American Express Co. to begin seeking partners to issue their cards.

Morgan Stanley said Monday that its board of directors had approved a plan to spin off its Discover Card credit division, leading to increased speculation that the entire company could be on the block. Shares of the Wall Street brokerage rose $1.43 to $58.30 on media reports of the sale during regular trading. Shares climbed as high as $59.30 in after-hours trading. No potential buyer has been identified.