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by 10/4/2000 9:01 AM
Stocks quoted in this article:
Perpetuating the saga of mergers within the banking sector, it was announced this morning that Firstar (FSR – 22-1/4) is in a definitive merger pact with US Bancorp (USB – 23-3/16). In a deal valued at $21.2 billion, FSR will exchange 1.265 of its shares for each USB share, or about $28.30 per share. This amounts to about a 22-percent premium over USB's close yesterday. FSR says the deal has been approved by both boards and expects a closing in the first quarter. The combined company will operate under the US Bancorp name.

USB broke above peak October call open interest at the 22-1/2 strike yesterday. As the stock moves to the upside from a brief consolidation period around 21, Schaeffer's put/call open interest ratio on the equity has been climbing higher. This indicates growing pessimism on the shares. For more details about SOIR, please visit Schaeffer's Daily Sentiment.

On the other hand, FSR broke from consolidation around the 25 level to the downside after fighting a losing battle with its peak open-interest strike, the 25 call.

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by 10/3/2000 3:42 PM
Stocks quoted in this article:
After racing as high as 301-3/4 earlier today, Corning (GLW – 292-1/4) is down over two points in late-afternoon trading. This decline comes in front of the company's three-for-one stock split, which will occur before Wednesday's opening bell. GLW is presently poised to tally its fifth consecutive losing session, as it has now dropped beneath its upsloping 10-week moving average. The equity has closed only one week below this intermediate-term trendline since the beginning of June.

On the options front today, 2,168 and 1,657 contracts have crossed the tape on the October 290 and 300 calls, respectively. The October 290 call has open interest of 1,530 contracts, while open interest on the October 300 call stands at 3,323 contracts.

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by 10/3/2000 3:34 PM
Stocks quoted in this article:
PepsiCo (PEP – 46-5/16) should report third-quarter earnings tomorrow. The company is expected to post earnings of 39 cents per share, which would exceed the year-ago figure of 34 cents per share. In its most recent earnings announcement, PEP revealed on July 13 that its second-quarter earnings came in at 38 cents per share, surpassing brokers' forecasts by two cents per share.

The security swelled to an all-time intraday best this morning ahead of the earnings report, but it has stepped back into the minus column this afternoon. Currently, the shares are on negative ground by greater than two percent, as they approach their uptrending 10-day moving average.

The out-of-the-money January 2002 40 put is leading the way in PEP's options pit today on volume of 500 contracts.

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by 10/3/2000 3:15 PM
Stocks quoted in this article:
Commerce One (CMRC – 63-1/4) has dropped almost 13 percent after a brokerage firm cut its rating on the stock from "accumulate" to "hold." Although the equity has now broken below both its 10-day and 20-day moving averages, support appears to be holding at its 10-week trendline.

Expectations have been running high on CMRC based on its options configuration. Schaeffer's put/call open interest ratio (SOIR) is trending near its lowest level of the year at 0.27, which indicates that calls outnumber puts by a ratio of more than 3.5 to one. For more information on SOIR, please visit Schaeffer's Daily Sentiment.
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by 10/3/2000 3:14 PM
Stocks quoted in this article:
A brokerage firm cut its rating on Biovail (BVF – 70-3/8) from "buy" to "market perform" today. After hitting an all-time high yesterday, the stock is off almost 19 percent in reaction to today's news. The shares are presently attempting to hold support at their 10-week moving average.

Call players are apparently running for the exits. The busiest BVF option is the October 75 call, which has seen 910 contracts cross the tape on open interest of 937 contracts. The October 70 put has logged volume of 184 contracts. Since this option has open interest of just 58 contracts, some of this action will likely result in new positions. <
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