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by 10/18/2000 10:38 AM
Stocks quoted in this article:
The PHLX Forest and Paper Products Index (FPP – 241.69) is serving as a safe haven amid this morning's broad-market bloodbath, rising nearly three points. The FPP attained low levels not seen since mid-October 1998 earlier today before rebounding. The index, though, remains beneath all of its significant moving averages.

Top FPP performers today include Boise Cascade (BCC – 23-1/4), up 4.7 percent; Willamette Industries (WLL – 27-3/8), up 4.7 percent; Temple-Inland (TIN – 36-1/16), up 3.2 percent; Weyerhaeuser (WY – 37-13/16), up three percent; and Mead (MEA – 22-1/2), up 2.5 percent. This morning, MEA reported third-quarter earnings of 61 cents per share, besting brokers' forecasts by four cents per share.


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by 10/18/2000 10:36 AM
Stocks quoted in this article:
This morning, Avon Products (AVP – 42-13/16) posted third-quarter earnings of 39 cents per share, which was a penny per share ahead of Street projections. According to I/B/E/S International, this marked the firm's fifth consecutive positive earnings surprise. The company's chief financial officer said that AVP's fourth-quarter net income expectation of 66 cents per share may be too higher by one or two cents per share.

The security gapped fractionally higher at today's open and reached as high as 45-5/16 before falling into the red in reaction to the CFO's comments. The shares are now lower by just over one point, or more than two percent, to slip back below their 10-day moving average, a trendline that the equity hasn't closed a session beneath since September 27. AVP, though, has obtained reliable support throughout this month from its 20-month moving average.

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by 10/18/2000 10:25 AM
Stocks quoted in this article:
Ericsson Telephone (ERICY – 13-7/16) manufactures a variety of equipment for the telecommunications and networking industries, including mobile phones and modem apparatus. Yesterday morning, the company announced that it expects to post a 21-percent rise in profits for the third quarter. However, it was also noted that ERICY's mobile phone unit could see widened losses.

This news spurred a rash of options buying, most notably at the January 13-3/4 strike. Nearly 8,000 contracts traded on the January 13-3/4 put, while 6,000 contracts crossed the tape on the correlating call. Large block trades crossed the tape on both strikes shortly after 2:30 p.m. The blocks were not indicated as spreads but are almost certainly related given the similarity in volume and time. Nearly all of yesterday's volume translated into new open interest today.

In early morning trading, ERICY has sunk along with the rest of the market, sloughing off over five percent and enduring a bear gap at the open. The shares are now trading below all of their significant moving averages, including their 20-month trendline.
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by 10/18/2000 9:26 AM
Stocks quoted in this article:
As a follow-up to a Market Observation on Boeing (BA – 60-1/2), the blue-chip issue reported this morning that its third-quarter earnings came in at 72 cents per share, topping Street estimates by five cents per share. It was the sixth straight positive earnings surprise for the company, according to I/B/E/S International.

Ahead of this earnings announcement, the stock moved fractionally higher on Tuesday to post its third consecutive winning session. With today's expected move upward in response to this positive fundamental news, the shares could overtake their 20-day moving average, a trendline that has offered stingy overhead resistance for the past week and a half.


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by 10/18/2000 9:21 AM
Stocks quoted in this article:
Teradyne (TER – 25) plunged 27 percent on Tuesday to its lowest level since May 1999. Yesterday, the company reported third-quarter earnings of 84 cents per share, a penny ahead of estimates. However, the company warned that it would miss Street earnings expectations for the fourth quarter. This news prompted Merrill Lynch to downgrade the stock from "buy" to near-term "accumulate."

Since its all-time high in early May, the equity has come unraveled, falling over 78 percent to trade below all its key moving averages.

Despite TER's collapse yesterday, almost 2,800 contracts were added to the October 30 call. This in an aggressive bet since this option expires on Friday.
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