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by 12/19/2000 3:32 PM
Stocks quoted in this article:
The market does not seem to be pleased with the Fed's refusal to cut interest rates. Investors and traders alike are voting with their money, choosing to cash out. Some troubling signs that we are observing include further new lows from big-cap Nasdaq Composite (COMP – 2550.9) names. Two issues unfamiliar to the "new low" list a year ago are there today, as Microsoft (MSFT – 45) and Cisco Systems (CSCO – 42-1/2) both have the dubious distinction of new annual nadirs.
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by 12/19/2000 12:05 PM
Stocks quoted in this article:
By now, it is no secret that the dollars have fallen off of the tree. Last evening after the market closed, Dollar Tree (DLTR - 21-7/16) guided its fourth-quarter earnings downward. The Street had been expecting 70 cents per share. The company now forecasts around 59 to 62 cents per share. In extended trading, the shares reacted like an old oak tree in an autumn rainstorm, dropping over 14 points. In today's trading, the stock has recovered somewhat from a new intraday yearly low of 20-3/4.

On the options front, a block of 500 contracts on the January 35 put appears to have been closed at a tidy profit. The position was opened on November 20 at 2-5/16 and closed today for 13. The February 35 call is the site of peak open interest, with 3,500 contracts. This option now carries a bid price of 1/8 and has traded just 20 contracts so far today.
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by 12/19/2000 12:02 PM
Stocks quoted in this article:
Shares of optical networking equipment maker Ciena (CIEN - 86) are suffering from this morning's announcement of their intent to purchase privately held Cyras Systems. CIEN shares traded down as much as 13 percent in pre-market trading. The deal will cost $2.6 billion in stock and will be dilutive to CIEN's 2001 earnings to the tune of 19 to 22 cents per share. The news has caused the stock to fall below its 20-day moving average, a trendline the shares have closed above over the past two weeks.

Today's options activity on CIEN seems very evenly divided between puts and calls. The most active options include the January 105 call, which has traded 532 contracts on open interest of 3,653. A block of 250 shares changed hands at the ask price, most likely meaning a purchase. The most active put is the January 100 which has traded 536 contracts, on open interet of 3,764. A block of 400 contracts that changed hands at this strike was probably a sale or a closeout.<
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by 12/19/2000 10:48 AM
Stocks quoted in this article:
Solectron (SLR – 30.75), the world's largest contract electronics manufacturer, announced fiscal first-quarter results after yesterday's market close. Earnings of 29 cents per share beat the Street views by a penny. Revenue doubled, while net income rose 74 percent. The company forecast earnings for 2001 of $1.22 to $1.25 per share, compared to consensus figures of $1.15.

This was excellent news, since the contract manufacturing firms have suffered steep stock declines recently, due to warnings of slower sales from their clients who produce computers. Shares of SLR are trading at about half of their 52-week high of 52-5/8 on October 24. Yet, this morning on CNBC, the company's chairman and CEO painted a rosy picture for SLR's future. He stated that a slowing economy causes more companies to outsource in order to save money. Demand for data networking and telecommunications products was said to have offset the slowdown in personal computer and mobile phone manufacturing. But, some analysts feel it is only a matter of time before the slowdown hits SLR as well. Only time will tell.
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by 12/19/2000 9:47 AM
Stocks quoted in this article:
In the past week, optical networker Sycamore Networks (SCMR - 50-1/8) has been unable to follow through on a rally that saw the stock nearly double in value from its November 30 intraday low to its December 12 intraday high. SCMR has dropped 28 percent since its December 12 close. In the process, the shares have moved back below their 20-day moving average. This trendline has quelled attempts to rally several times over the past four months, proving staunch resistance during this decline.

In yesterday's option activity, the January 70 call saw heavy volume. Altogether, over 6,900 contracts changed hands on this out-of-the-money option, causing open interest to rise by over 5,600 contracts.
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