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by 12/4/2000 11:01 AM
Stocks quoted in this article:
At this point in time, it is difficult to determine if Cleveland paint manufacturer, Sherwin-Williams (SHW - 22-1/4), will be singing "A Whiter Shade of Pale" or "Black is Black." This morning, SHW reduced its earnings outlook for fiscal year 2001. The company said its sales increase for the year will drop to the low end of its previously projected 4% to 6% range. SHW expects earnings to come in at $1.90 per diluted share for the year, below the $1.96 to $2 per share previously projected in October. The current Street estimate is $1.97 a share.

In a press release today, the company said poor sales of exterior coatings in paint-store and consumer segments ate into operating profit margins. Also cited were softer than anticipated retail markets, causing major retailers in the U.S. and U.K. markets to make inventory corrections. The shares first dipped in response to the news, but have since rebounded.

Options traders have shown little interest in the stock. Total open interest is just 1,908 contracts, represented by 646 open put positions and 1,262 open call positions.

Short interest over the most recent reporting period increased by almost 34 percent, as short sellers have little incentive to cover their positions. The shares have not closed above their 20-month moving average since May, 1999.
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by 12/4/2000 9:53 AM
Stocks quoted in this article:
Walgreen Co. (WAG - 43-1/4) shares were downgraded to "neutral" from "outperform" this morning by a major brokerage house. A rich price-to-earnings ratio of over 50 was cited as the reason for the downgrade. Over the last five months, WAG shares have trended higher relying on the combined support of their 10-week and 20-week moving averages. Option activity on WAG last Friday was minimal.
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by 12/4/2000 9:52 AM
Stocks quoted in this article:
ONI Systems (ONIS - 51) finished Friday's trading up over 17 percent. This followed a possible key reversal day on Thursday when the stock did an about-face from it's intraday low of 33-1/4 to finish over ten points higher at 43-1/2. Despite its strong finish last week, ONIS still remains below the site of its overhead 10-day moving average, at approximately 52.

A pair of January calls was active on Friday in what is likely the initiation of a large spread position. The January 70 call saw nearly 5,400 contracts change hands, while nearly 5,000 contracts changed hands on the January 45 call.
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by 12/1/2000 4:41 PM
Stocks quoted in this article:
This morning, the Commerce Department released October construction spending figures, which rose for the third straight month to their highest level since March. This latest monthly rise of 0.9 percent follows the previous month's revised rate of 1.9 percent and translates to an annual rate of $825.0 billion.

The increase in construction spending was attributed to healthy home sales and additional hiring by builders. The recent increases, small as they are, still bring into question whether the summer fall-off was merely a pause in the robust housing sector, which is now up nine percent, year-over-year.

In contrast, many other areas of the economy have shown signs of slowing in the past few months, leading some to believe that the Federal Reserve must soon entertain the idea of lowering rates.
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by 12/1/2000 3:41 PM
Stocks quoted in this article:
Today's release of November's National Association of Purchasing Management (NAPM) data was a mild surprise to market watchers. The business index, considered a broad gauge of manufacturing strength, fell slightly from October's figure of 48.3 to 47.7. This is the fourth straight month the measure has been below 50, indicating a continuation of slowing manufacturing activity throughout the U.S. Index readings below 50 indicate a contraction of manufacturing activity and prices, while readings above 50 suggest expansion.

The November reading corresponds to an annualized Gross Domestic Product (GDP) of 1.9 percent, much lower than the previous three quarters and somewhat below the Fed's desired moderate growth rate. The prices paid index, a gauge of material cost pressures, rose only slightly to 56.6 from October's 56.5. These numbers suggest that the Fed's rate increases of the past year have slowed the economy markedly and the threat of inflation from higher prices does not yet exist. <
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