Buzz Stocks: Microsoft Corporation, Reynolds American, Inc., and Coach Inc

Today's stocks to watch in the news include Microsoft Corporation (NASDAQ:MSFT), Reynolds American, Inc. (NYSE:RAI), and Coach Inc (NYSE:COH)

Oct 21, 2016 at 9:50 AM
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U.S. stocks are down as earnings continue to roll in. Among equities in focus today are tech stock Microsoft Corporation (NASDAQ:MSFT), tobacco company Reynolds American, Inc. (NYSE:RAI), and luxury retailer Coach Inc (NYSE:COH). Here's a quick look at what's driving MSFT, RAI, and COH.

  • MSFT is flying high after an earnings win, trading up 5.3% at $60.30, beating its previous all-time high of $59.97, notched in 1999. Since reporting earnings last night, MSFT has received an upgrade to "buy" from "hold" by Wunderlich, in addition to no fewer than 14 price-target hikes, including a raise to $70 from $60 by Wunderlich. Of course, analysts were already keen on the stock, with 17 of 24 rating the shares a "buy" or better, and with only one "sell" in sight. However, today's rally could have recent Microsoft Corporation call writers nervous.

  • RAI is also soaring this morning, trading up 19.3% at $56.28, after news that British American Tobacco PLC (ADR) (NYSEMKT:BTI) offered to purchase RAI for $47 billion, or $56.50 per share, although BTI already owns 42% of RAI. RAI said its board will need to evaluate the offer. Today's jump puts Reynolds American, Inc. shares up over 20% so far in 2016, and at a new all-time high. Some option bears are likely kicking rocks after this news, with RAI's 10-day put/call volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) of 1.34 sitting higher than 78% of all other readings from the past year.
  • COH is down 0.6% at $35.69, giving up all of its pre-market gains, after rumors of merger talks with Burberry were deniedCOH has given up 18.3% since its late July annual high of $43.71, and is now testing support near $35, which marks a 50% retracement of its rally from late October 2015 to July 2016. Some COH option players may breathe a sigh of relief if the rumors turn out to be false, given that Coach Inc's Schaeffer's put/call open interest ratio (SOIR) of 1.41 sits in the 97th percentile of its annual range, suggesting short-term option players have had a stronger-than-usual put bias as of late. 

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