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by 6/15/2000 4:01 PM
Stocks quoted in this article:
Diamond Offshore (DO - 37-11/16) is declining along with other oil-related issues today. Shortly after the open this morning, DO ran squarely into resistance at its downtrending 20-day moving average, a trendline the stock hasnít managed to close above since falling below it on May 19. A large options player apparently believes that DOís downtrend will continue, as it appears that a 4,700-contract block was rolled out from the June 40 put to the July 40 put. These are two of the busiest put contracts on the CBOE.<
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by 6/15/2000 3:24 PM
Stocks quoted in this article:
PSS World Medical (PSSI - 9-7/8) is down over four percent this afternoon, as the security is returning to its supportive 10-day moving average. The shares have also been supported this week by their upsloping 10-week trendline. Since its intraday low on May 26, the stock has stepped up by more than 27 percent. In PSSIís options pit today, investors appear to have taken profits on two previously in-the-money call positions. The June 10 call has seen volume of 1,214 contracts, while 3,332 contracts have traded on the July 10 call. Most of the activity at these two strikes has transpired at or below the bid price, indicating potential sells. These two options have open interest of 6,581 and 4,937 contracts, respectively. The July 10 call is among the most-active calls on the PHLX.<
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by 6/15/2000 3:12 PM
Stocks quoted in this article:
The Federal Reserve released May Industrial Production and Capacity Utilization numbers today. Industrial production unexpectedly rose in May by 0.4 percent. This was a slower rate of growth than April's 0.7-percent increase. However, the number came in higher than analysts' consensus estimates of a 0.3-percent fall. Capacity utilization, the measure of production facilities' space used for manufacturing, remained unchanged at 82.1 percent in May, higher than the 81.6 percent analysts had expected. The 82.1-percent readings in April and May are the highest since May 1998. The numbers are spurring debate as to whether they signal that the Fed must continue to act to remove the threat of inflation by raising short-term interest rates. Some economists believe that the recent increases in capacity utilization reflect inflationary pressures and are at levels that have prompted strong Fed interest-rate hikes in past years. However, other economists believe that even though capacity utilization has increased over the past two years, it may not yet be an inflationary threat. They believe that capacity shortages have provoked inflation when capacity utilization is closer to 86 percent. This data does conflict with recent data from other sources that show a slowing economy. The manufacturing sector continues to see sustained growth. <
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by 6/15/2000 2:49 PM
Stocks quoted in this article:
Thomas Hoenig, President of the Federal Reserve of Kansas City, spoke late yesterday and indicated that he believes that the economy does show signs of slowing, but he questions whether it is sustainable. Hoenig said that the Fed will determine its course of action at the June 27-28 Fed meeting after it reviews whether the slowing economy can sustain no more than a four-percent annualized growth rate. That is the Fed's "speed limit," a point above which the economy threatens to become inflationary. Hoenig also noted that there are signs of creeping inflationary pressures although they are not huge. Though Hoenig will be an attendant at the meeting and participates in monetary policy discussions, he is not a voting member of the Federal Open Market Committee. <
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by 6/15/2000 2:41 PM
Stocks quoted in this article:
The Philadelphia Federal Reserve released its June business survey results this morning, and the news indicated a significant slowing of manufacturing in the Northeast. The general business activity index fell sharply to only 1.7 in June from May's 20.2, indicating that manufacturing strength in the Philadelphia region has weakened. The index is calculated by subtracting the percentage of respondents who report a decline in manufacturing activity and prices from those who report increases. The prices paid and received indices showed that although respondents continue to see somewhat higher prices, those pressures may be easing just slightly. The prices paid index fell to 30.8 from May's 31.4. The prices received index rose, however, gaining nearly three points to 10.5 versus May's 7.7, indicating that while prices at the manufacturing level continue to rise, those prices are increasingly being passed on to consumers. <
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