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Midday Market Update: U.S. Stocks Find Positive Ground

After 2 days in the red, U.S. stocks turn positive

by Colleen S. King (cking@sir-inc.com) 11/21/2008 12:23 PM

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After a tumultuous week in the red, it seems the Street is trying something new - positive territory. Out of the gate this morning, the Dow tacked on more than 150 points, but has since backed off. At last look, U.S. stocks were trading moderately higher, rebounding after 2 days of losses, as investors digested a Wall Street Journal report that Citigroup Inc. (C) may put itself up for sale.

Economic News

There are no reports slated for release today. For a look at next week's earnings calendar, click here.

Equity Update

In earnings news, Salesforce.com (CRM: sentiment, chart, options) said that its third-quarter net income rose to $10.1 million, or 8 cents per share, from $6.5 million, or 5 cents per share, in the same quarter last year. Revenue increased to $276.5 million from $192.8 million. Analysts, on average, had forecast earnings of 8 cents per share on $273.6 million in sales. The company projected fourth-quarter earnings of 6 cents to 7 cents per share, and revenue of $284 million to $285 million. For fiscal 2010, the firm projected revenue of $1.35 billion to $1.36 billion. The stock tagged a fresh 3-year low this morning, and at last check, the shares were trading down more than 5%.

Cleveland-based financial firm KeyCorp (KEY: sentiment, chart, options) tumbled to a new all-time low this morning after slashing its common-stock dividend for the second time this year. The bank cut its quarterly payout by 67% to 6.25 cents per share from 18.75 cents, despite the fact that CEO Henry Meyer said last month he was "very comfortable" with the current dividend. Specifically, in a statement today he said, "The modification of our common dividend will help further strengthen Key's capital in light of the current uncertainty facing the U.S. and global economy." The slashed dividend could save KEY up to $428 million per year. At last look, the bank's shares were sitting on a loss of more than 25.5%.

Elsewhere, the Bank of New York Mellon (BK: sentiment, chart, options) became the latest financial firm to announce job cuts. The company said last night that it will trim 1,800 jobs, or roughly 4.2% of its global workforce. CEO Robert P. Kelly said the payroll reduction will aid in reducing expenses, and added, "We will take advantage of natural turnover to lessen the impact on existing staff." The shares of the firm were last seen down 1.5%.

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Options Stew: A Taste of the Week's Spiciest Plays

(11/20/2009 10:45:27 AM)

Welcome to our new video series, Options Stew, where we take a look back at what's been cookin' in the option pits this week. Join us as we sample just a few of the unusual option plays from the past week, with our "recipe" broken down into three unique segments:

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Schaeffer's Media Outtake: Thoughts on Hedging, Volatility

(11/19/2009 4:15:00 PM)

"Standard & Poor's, the world's leading index provider, announced today the launch of the S&P 500 Dynamic VEQTOR Index which dynamically allocates between equity, volatility and cash to provide broad equity market exposure with an implied volatility hedge. 'Implied equity volatility typically has a strong negative correlation to equity market returns, and is considered a useful tool to hedge against the potential downside risk of the broad equity market,' says Liz Taxin, Director of Strategy Indices for S&P Indices. The S&P 500 Dynamic VEQTOR Index is comprised of three components: Equity, as represented by the S&P 500; Volatility, as represented by the S&P 500 Short-Term VIX Futures Index; and Cash, as represented by the Overnight LIBOR rate. The Index allocates between equity and volatility based on the combination of realized and implied volatility trend decision variables, and these allocations are evaluated on a daily basis."
(PR newswire � 11/18/09)

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Put Trading Swells on J. Crew Group Ahead of Earnings

(11/18/2009 11:05:48 AM)

Retailers continue to line up for the earnings confessional, and one particular high-flyer is slated to release its quarterly report next week. J. Crew Group Inc. (JCG: sentiment, chart, options) is known for its preppy fashions, including jeans, khakis, and other basic (but often pricey) items sold to young professionals. J. Crew sells through its catalogs, Web sites, and some 300 retail and outlet stores in the U.S. under the J. Crew, crewcuts (for kids), and Madewell banners. Madewell, launched in 2006, is a women's-only collection of hip, casual clothes.

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Drilling Down on Rowan Companies' Rally Prospects

(11/18/2009 10:00:00 AM)

Rowan Companies Inc. (RDC: sentiment, chart, options) performs contract drilling of oil and gas wells. Its fleet consists of 22 jack-up rigs and 32 land-drilling rigs. The company operates primarily in the Middle East, Texas, the Gulf of Mexico, and the North Sea.

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Drug Delay Prompts Put Trading on ISIS Pharmaceuticals, Inc. (ISIS)

(11/17/2009 1:50:13 PM)

Bearish option bettors have virtually blitzed ISIS Pharmaceuticals, Inc. (ISIS: sentiment, chart, options) today, with intraday put volume skyrocketing to nearly 38 times the norm. The pharmaceutical firm this morning confessed that it's delaying plans to seek approval for experimental drug mipomersen by nearly a year, from mid-2010 to mid-2011.

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Pre-Earnings Option Activity Accelerates on Sears Holdings Corporation

(11/16/2009 1:55:56 PM)

Sears Holdings Corporation (SHLD: sentiment, chart, options) has been a hot topic on both sides of the options aisle today, as investors race to place their bets ahead of the retailer's looming turn on the earnings stage. According to Thomson Reuters, the firm is expected to report its third-quarter figures before the opening bell on Thursday, Nov. 19.

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Options Traders Bulk Up on Puts on Software Vendor

(11/13/2009 12:34:23 PM)

Options players are placing some heavy bets that salesforce.com inc. (CRM: sentiment, chart, options) is going to suffer a disappointing earnings report next week, as traders load up on puts. The International Securities Exchange (ISE) has reported 2.7 puts purchased to open for every one call purchased to open during the past 10 trading sessions. This ratio of puts to calls is higher than 93.8% of all those taken during the past year. In other words, puts are significantly more popular than calls among traders.

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Hopes Are Riding High for GameStop's Earnings

(11/13/2009 11:35:33 AM)

The video game sector is struggling. U.S. video game sales dropped by 18% in October compared to the same period last year, according to the latest data from NPD Group. Meanwhile, analysts had forecast a more modest decline of 11%.

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Options Stew: A Taste of the Week's Spiciest Plays

(11/13/2009 10:55:42 AM)

Betting on a Short-Term Bounce for First Solar, Inc. (FSLR)

(11/12/2009 3:15:41 PM)

Call traders have been fond of First Solar, Inc. (FSLR: sentiment, chart, options) today, despite the solar concern's retreat into the red. In afternoon trading, the security has already seen roughly 18,000 calls cross the tape � nearly tripling its average intraday volume of fewer than 6,250 contracts.

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Midday Market Update: U.S. Stocks Find Positive Ground

After 2 days in the red, U.S. stocks turn positive

by Colleen S. King (cking@sir-inc.com) 11/21/2008 12:23 PM

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