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by 11/27/2000 9:44 AM
Stocks quoted in this article:
One sector index to keep an eye on today is the AMEX Morgan Stanley Healthcare Payors Index (HMO - 426.22). The index was rocked last Monday when a major brokerage house downgraded a number of names in the sector. The HMO retreated to successfully test its ascending 20-day moving average in response to the negative analyst news. Now the index is poised to react positively to yesterday's news that George W. Bush has been certified the winner of the presidential election in Florida. <
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by 11/27/2000 9:42 AM
Stocks quoted in this article:
Despite a holiday-shortened trading session on Friday, the December 75 put on Veritas Software (VRTS - 100-7/8) saw heavy volume. Across all exchanges over 20,000 contracts changed hands on this out-of-the-money option. Most of the volume consisted of two large block trades during the last hour of trading. Block trades of 8,500 contracts and 7,600 contracts each changed hands at 1-1/8, at or near the bid price. Open interest on the option declined from over 3,500 contracts to 208 contracts as a result of Friday's activity. VRTS shares tacked on 7-1/2 points on Friday, but still remain well below their overhead 10-day moving average, which stands at approximately 110. <
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by 11/22/2000 2:58 PM
Stocks quoted in this article:
Two companies that announced better-than-expected earnings after the bell last evening are getting crushed today. The common thread is that they both sell their products to the telecommunications industry. CacheFlow (CFLO – 42-3/16), a seller of network caching equipment, has seen its shares fall over 40 percent today on five times normal volume. The company reported a loss of nine cents per share versus expectations of an eleven-cent loss. Sales were 45 percent higher than the previous quarter and grew from $4.8 million the same quarter last year to $32.5 million this year. So what's the catch? Management failed to revise guidance upward for 2001 and there is concern about decelerating sequential revenue growth.

Portal Software (PRSF – 7-1/16) was trading as high as 21-1/8 yesterday. It earned a profit of $.04 per share, which doubled expectations, while revenue was up 157 percent over last year. That does not sound like a reason for the stock to be annihilated or to receive three downgrades. But it still was not good enough. License revenues and gross margins did not meet Wall Street's expectations. The real concern about lower licensing revenue is that emerging telecommunication companies such as local carriers are facing a crisis themselves, with lower stock valuations and an inability to obtain further financing for capital expenditures. Consequently, these and other companies associated with the telecom industry are facing a "fire first, ask questions later" skepticism from the investment community.

Despite this precipitous decline, PRSF options trading remains light, though most activity is on the call side. CFLO, however, saw 1,000 contract blocks trade on the out-of-the-money December 80 and December 95 calls, probably institutional purchases. Also crossing the tape were 537 December 90 puts and 651 December 100 puts, in various-sized blocks.
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by 11/22/2000 2:49 PM
Stocks quoted in this article:
General Motors (GM – 50-9/16), the number-one automaker in the United States, has slumped nearly 1.5 percent today to post a new annual low at the 50-3/8 mark. Today's decline, which comes on the heels of yesterday's minor losses, was catalyzed by news that Bank of America cut its 12-month price target for the security. The brokerage firm reduced its figure by nearly 19 percent, dropping it from 80 to 65, a mere 28 percent improvement over the stock's present lackluster level.

Options activity is light on GM today, given the rapid encroachment of the Thanksgiving holiday. A few strikes have seen over 100 contracts change hands, but that is the extent of the activity. <
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by 11/22/2000 11:46 AM
Stocks quoted in this article:
Drug Emporium (DEMP – 3/8) owns 140 stores and franchises 40 other locations in 20 states. The company runs supermarket-sized pharmaceutical retailers that sell health and beauty aids, as well as grocery products and general merchandise.

Having traded on the Nasdaq Exchange for nearly 12 years, the stock is now in danger of losing its market spot. Today, a report was issued stating that Nasdaq officials have told DEMP it will be delisted on January 26 if it fails to maintain the market's minimum bid of $1 per share for 10 consecutive trading sessions. Yesterday, the stock closed at about 44 cents per share.

Today's news isn't getting the company any closer to meeting this goal; the stock has dropped over 14 percent to trade at just over 37 cents per share. <
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