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by 9/28/2000 4:40 PM
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As a follow-up to yesterday's Market Observation on Procter & Gamble (PG 66-15/16), this beleaguered consumer issue today surged ahead by just over five points, or more than eight percent, after the company said that it sees sales growth of two to three percent for full-year 2001. In addition, PG anticipates full-year 2001 earnings-per-share growth of seven to 10 percent.

With this price action, the shares reached their highest intraday level in more than five months. They also broke out of a short-term trading range that had capped the security between the 60 and 64-1/2 levels since August 15.

As discussed in the Market Observation, investors expectations were low on PG, as evidenced by heavy put activity yesterday. The out-of-the-money November 55 put saw its open interest increase by 3,000 contracts on Wednesday, while open interest on the January 55 put rose by 5,000 contracts. Our research shows that this rise in pessimism, along with the company's earnings report today, could have bullish implications for the equity.

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by 9/28/2000 4:09 PM
Stocks quoted in this article:
The Commerce Department released its final third-quarter Gross Domestic Product (GDP) figure this morning. The result was something of a surprise, coming in at an upwardly revised 5.6-percent rate of growth. Analysts had expected the figure to remain at the previously announced 5.3 percent from the preliminary number released last month.

One positive in the report is the downward revision of the PCE Price Index. This index, purportedly one of the Fed's most important gauges of inflation, was revised downward by 0.2 percent to a 2.1-percent annualized rate.

Corporate profits are another area of current concern for the markets. However, corporate profits for the third quarter were upwardly revised by 0.1 percent to a 2.5-percent annualized growth rate.
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by 9/28/2000 3:59 PM
Stocks quoted in this article:
A consumer confidence poll released yesterday suggests consumers continue to be quite confident about their financial situations, even though confidence has dropped recently. The poll's sponsors, a major monthly financial publication and a major television network, said that overall consumer confidence fell for the third consecutive week to 29 from last week's reading of 30. The three-week drop has shaved five points from the gauge. That reading is equal to its average of 29 this year and nine points below its 12-month high of 38 made in January.

According to the survey, positive sentiment toward buying was 52 percent. Confidence in personal finances was 65 percent. The percentage of those polled who viewed the U.S. economy positively was 77 percent. All three readings are within five percentage points of their all-time highs.
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by 9/28/2000 2:03 PM
Stocks quoted in this article:
The AMEX Networking Index (NWX 1190.4) is on positive ground by just over 22 points, or nearly two percent, this afternoon. Earlier today before it headed higher, the index fell to its lowest intraday mark since June 15. The NWX, which had retreated by 18 percent from its near-term intraday high on September 1 to today's intraday low, is now quickly approaching its overhead 10-day and 20-week moving averages.

NWX components performing well this afternoon include Lucent Technologies (LU 31-13/16), up 10.6 percent; ADC Telecommunications (ADCT 27-1/2), up 7.6 percent; Comverse Technology (CMVT 105-1/4), up 7.4 percent; and Nortel Networks (NT 62-1/2), up 5.1 percent.

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by 9/28/2000 1:00 PM
Stocks quoted in this article:
Cosmetics and personal goods purveyor Avon Products (AVP 41-7/16) is trading nearly four percent higher today on a positive earnings forecast. Last night after the close, company officials said they concur with analysts' third-quarter earnings estimates of 38 cents per share. Additionally, the firm said it is in negotiations to sell its products at 150 to 200 Sears (S 34.55) and J.C. Penney (JCP 12-7/16) stores.

Since late April, AVP shares have been sandwiched in a range between the 35 and 43 levels. The equity has been trending sideways in this range for five months, with no notable support or resistance from any moving averages. Today's boost higher has taken the stock toward the upper rail of this consolidation range.
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