The beleaguered banking sector has found no shelter from the storm. The PHLX KBW Banking Index (BKX – 742.72) is only modestly above its October lows and is still more than 20 percent off of its July 1998 high. More cautious comments are hitting the group today from a major brokerage analyst who reiterated his caution. The BKX is lower by 1.2 percent today.<
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On the new-high list this morning is Texas Instruments (TXN - 114-1/4), which has rallied over four percent to reach the 115-1/16 mark. This move effectively took the shares above potential "triple-top" resistance around the 110 region. Despite the stock's recent strength, options players are displaying a pessimistic lean toward TXN. Presently, the Schaeffer's put/call open interest ratio (SOIR) on TXN stands at 1.05. This means that for every 100 calls added on TXN, 105 puts are added alongside. What's more, this SOIR reading is in the 70th percentile of all readings over the past 52 weeks. Any reading at or above 70 signals a sign of bearishness from the options crowd, according to our quantitative analysis. From a contrarian view, such pessimism seen on an uptrending stock bodes well for the equity's short-term outlook.

(For more information on put/call open interest ratio information, please visit Schaeffer's Daily Sentiment) <
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General Motors (GM - 82-7/16) peeled out from the earnings confessional this morning after announcing fourth-quarter earnings of $1.86 per share, beating the Street's consensus estimate by a nickel. In addition, the company reported that revenue for 1999 marked a record for the automaker. On Tuesday, GM shares reached a new all-time high of 85-3/4. Today, the stock is already trading more than one percent higher on the heels of the earnings news.
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VISX Inc. (VISX - 45-3/8) designs and develops technology for laser vision correction. Last night after the close, VISX announced fourth-quarter earnings of 38 cents per share, matching analysts' estimates. This morning, this news has been met with a brokerage downgrade from a "buy" to a "hold." According to the latest research from Zacks Online, nine analysts rated VISX as a "buy" prior to today, while six listed it a "hold." Since achieving a high of 103 in late July, VISX has endured a slow burn lower, shedding over 55 percent during the last six months. This month, the stock has breached its 20-month moving average for the first time since January 1998.<
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Things aren't shaping up well for Legato Systems (LGTO - 53-5/8) this morning, as the stock is showing a 44-percent loss in pre-session activity. After closing above the 53 mark last night, the shares are now asked at 28-3/4. After the closing bell yesterday, the networking company reported fourth-quarter earnings of 11 cents per share, falling far short of analysts' expectations of 19 cents. Before today, analysts were notably bullish on the shares, according to the latest data from Zacks Online. In fact, 17 of the 18 brokerage houses covering the shares had rated the stock a "buy." Already this morning, one brokerage firm has downgraded LGTO to a "hold." If more downgrades follow, it could prove to be a truly disastrous day for the shares.
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