STOCKS NEWS US-Best Buy gets bullish three-way trade

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1343 ET 26Feb2010 Best Buy draws bullish three
way strategy

One large investor initiated a bullish three-way strategy on electronics retailer Best Buy with specific expectations. The investor apparently bought the April $37-$40 (1X2) call spread while selling April $34 puts, 4,000 times on the International Securities Exchange, said WhatsTrading.com option strategist Frederic Ruffy. Sentiment data on the ISE indicate that 4,000 of the calls are opening customer buyers. The investor bought 4,000 April $37 calls and sold 8,000 April $40 call strikes and 4,000 April $34 puts. This resulted in a net credit of 8 cents per contract on the package, Ruffy said.

OptionMonster analyst David Russell said 'the trade is designed to leverage a rebound to no greater than $40, which has been a relevant support and resistance level over the last year.' If it closes at that level, the investor will pocket $3 in addition to the small credit already earned,' Russell said in comments on the Web site. He also noted the gains will erode above $40 and become losses over $43. The trader will also lose money if Best Buy shares fall below about $34.

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1256 ET 26Feb2010 Morgan Stanley April calls grab interest

It appears that a Morgan Stanley investor loaded up on near-term call options, boosting options volume in the banking giant, said Jud Pyle, chief investment strategist at www.ONN.tv. The investor paid roughly 31 cents per contract for one large block of April $31 calls totaling 10,000 contracts. Its shares rose 1.12 percent to $28.05 in afternoon trade.

Pyle said the stock's option implied volatility of these out-of-the-money calls stood at 29 percent down from a 30-day historical volatility on the stock of 36 percent.

Investors who bought the MS April $31 calls will make money if the stock tops $31.31 by April expiration in 49 days. There was no apparent news on the company.

The market expects its next quarterly report sometime around April 22. which at that time, these calls would be the front-month contracts, Pyle said. He surmised the investor is most likely betting that volatility will climb throughout the next month leading up to April expiration.

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1152 ET 26Feb2010 Bulls load up on JDS Uniphase call options

Options investors appear to have taken a bullish stance in JDS Uniphase Corp. Shares of the telecoms equipment maker rose 3.51 percent to $10.62 near midday. Earlier in the session, more than 9,200 March $11 calls traded at the ask price of 25 cents per contract thanks to an investor who likely bought these out-of-the-money options, calling for further gains in the stock, said Jud Pyle, chief investment strategist at www.ONN.tv. The March $11 calls are home to current open interest of 803 contracts, indicating the majority of the investors opened a long call position. Volume in that strike has expanded to more than 10,840 contracts by midday, Reuters data show. 'Investors who bought these calls are betting on the stock to climb at least 5 percent throughout the near term.' This call purchase turns profits if JDSU shares close higher than $11.25, Pyle said. There appeared to be no news that could have sparked the call action.

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1144 EST 26Feb2010
Stifel downgrades four oil and gas companies

Stifel Nicolaus cut four independent oil and gas exploration companies to 'hold' from 'buy,' including Ultra Petroleum Corp and Pioneer Natural Resources Inc, citing valuation and lower-than-expected demand.

'For the past month, we have been cautious of the exploration and production space given current valuations and our view that the equities are ahead of the commodities, which in turn are ahead of the fundamentals,' analyst Amir Arif wrote in a note to clients.

The analyst, who also downgraded Cabot Oil & Gas Corp and SandRidge Energy Inc, sees downside risk for the sector as tightening in supply and demand fundamentals for oil and gas might not live up to expectations.

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1136 EST 26Feb2010
IMF says may need to build up its reserves

The International Monetary Fund on Thursday proposed beefing up its mandate through more aggressive monitoring and coming up with more reliable funding to dissuade countries from building huge currency stockpiles.

The recent global financial crisis has forced the IMF to rethink ways it can avoid a repeat of the turmoil that has shaken the world economy since late 2008.

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1137 EST 26Feb2010
Wall St on track for best month since Nov '09

Both the Dow and the S&P 500 were on track for their best monthly performance since November 2009 in Friday's trading. The Nasdaq was set for its best monthly advance since December.

The Dow is up 2.7 percent for March, while the S&P 500 has climbed 3 percent and the Nasdaq has advanced by more than 4.3 percent.

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1123 EST 26Feb2010
Markets edge higher as economy sends mixed signals

U.S. stocks edged higher in choppy trade on Friday as investors got mixed signals from the economy.

A report that Germany may consider buying Greek bonds as an emergency measure to help the debt-ridden nation was one bright spot for investors worried about sovereign default in the euro zone.

In its second reading of fourth-quarter gross domestic product, the Commerce Department said the economy grew at a 5.9 percent annual rate, better than the 5.7 percent pace estimated last month.

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The Dow Jones industrial average gained 20.56 points, or 0.20 percent, to 10,341.59. The Standard & Poor's 500 Index rose 2.23 points, or 0.20 percent, to 1,105.17. The Nasdaq Composite Index added 2.35 points, or 0.11 percent, to 2,236.57.

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1113 EST 26Feb2010
BancorpSouth shares drop, to adjust Q4 results

Shares of BancorpSouth Inc fell as much as 22 percent on Friday, a day after the bank-holding company said it may adjust its reported fourth-quarter earnings that may result in a decrease in net income.

The company said it had delayed its filing of annual report and is reviewing certain asset quality indicators, including the allowance for credit losses. On Jan. 21, the company posted a quarterly net income of $19.4 million, or 23 cents a share, below Wall Street estimates of 29 cents a share.

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