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