Stocks on the move Real-Time Equity news
U.S. stock market report
1724 ET-06April2009
China ETF calendar spread looks for rally in 2010
Shares of the iShares FTSE/Xinhua China 25 Index exchange-traded fund fell 1 cent to $30.94. In the options market, one trader enacted a bullish calendar spread, looking for a significant rally in the ETF at the start of 2010, said Interactive Brokers Group analyst Andrew Wilkinson. The investor sold 8,500 calls at the May $32 strike price for an average premium of $1.60 and repurchased 8,500 calls at the January 2010 $40 strike price for $1.70 each. The trader gets a credit of 10 cents for rolling the position forward while bearing the risk that shares rise above $32 as he is short 8,500 calls at the May $32 strike, he said. This trade implies the investor does not see shares rallying above $32 by May expiration but does want to see shares rise by 31 percent to break through the January $40 strike by January expiration.
Meanwhile, traders bought 15,000 puts at the May $25 strike for 60 cents apiece along with some 10,000 puts which traded to the middle of the market at the August $25 strike for $2 each.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
(Corrects RIC in first item to UNP.N)
1649 ET-06April2009
Option traders bet on higher volatility in Union Pacific
Union Pacific Corp option volume was double the normal levels as 11,000 puts and 15,000 calls traded, according to Trade Alert. Shares of railroad fell 4.4 percent to $44.06 after rallying 9.9 percent this past Thursday along with similar gains experienced by other rail companies, said Andrew Wilkinson, market analyst at Interactive Brokers Group. One player seemed to be looking for volatility to increase on the stock with the purchase of a May strangle, he said. At the May $43 strike price, 5,000 puts were bought for $3.70 each along with the purchase of 5,000 calls at the May $44 strike for 3.60 apiece. The net cost of the strangle was $7.30 and yields effective break even points at $35.70 on the downside and at $51.30 on the upside. This investor will begin to make money if shares can swing outside of the break even points. Using a reference price of $44.06, this would require either a rally of 16.4 percent or a decline in shares of 19 percent. Option implied volatility stood at 68 percent, up from Friday's 61 percent reading, he said.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1615 ET 06Apr2009 RTRS-US STOCKS
Wall St ends lower, weighed by bank unease
U.S. stocks ended lower on Monday, halting a four-day run-up, as a warning from a prominent analyst, Calyon's Mike Mayo, rekindled worries about banks, while a potential collapse of a takeover of Sun Microsystems hurt sentiment in the technology sector.
Even so, the market ended well off its worst levels, with some investors encouraged by a reassuring assessment of the bank sector from another closely followed bank analyst, Meredith Whitney. For details, see
For more details, see
Reuters Messaging: ellis.mnyandu.reuters.com@reuters.net
1557 ET 06April2009
Players scoop up TLT calls, likely betting on bond rally
Shares of the Barclays Capital 20+ Year U.S. Treasury Index fell 33 cents to $102.59 in late trade as bonds limp into the close. But some option players seem to be preparing for a big bond rally over the next two weeks, said Frederic Ruffy, options strategist at WhatsTrading.com. The top trade in the exchange-traded fund was 5,000 April $107 calls at the offer for 35 cents traded this morning. ISEE sentiment data on the ISE confirm the trade is an opening call buy. The activity continued throughout the day and 11,219 TLT April $107 calls traded, Reuters data show. The TLT tracks bonds with longer maturities in the Treasury market. Buying calls on the TLT reflects a bullish view on bonds. When the fund's stock price goes up, interest rates and yields are falling while government bond prices are rising. Conversely, the ETF's stock price drops when interest rates and yields rise while bond prices fall.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1458 ET 06April2009
TARP repayments seen hobbling lending, recovery
'Because Congress has now targeted CEO pay, banks are focused on repaying TARP (bailout money) more than lending, even if they have to access capital to do so,' said Marc Pado, U.S. market strategist AT Cantor Fitzgerald & Co in San Francisco.
'Now you're going to have the banks focused on repaying TARP and getting Congress out of their business, rather than spurring the economy.
'They (Congress) have now defeated the very purpose they were injecting the money for in the first place. It's that this is going to stop the economy from recovering, but it's going to certainly slow the pace of the recovery.'
Reuters Messaging rm://ellis.mnyandu.reuters.com@reuters.net
1458 ET 06April2009-Tech sector Q1 job cuts jump 27 pct vs Q4
report
Firms in the United States technology sector announced planned job cuts totaling 84,217 in the first quarter, up 27 percent from 66,312 in the previous quarter.
It was the largest quarterly job-cut tally for the sector since 2002, when 133,511 layoffs were announced in the fourth quarter, according to a report released on Monday by global outplacement firm Challenger, Gray & Christmas, Inc.
Despite the increase, quarterly tech job cuts remain well below the levels reached during the dotcom collapse that resulted in 1,163,742 tech-sector job cuts in 2001 and 2002.
During that period, employers announced an average of 145,467 job cuts each quarter, the outplacement firm added.
Reuters Messaging rm://ellis.mnyandu.reuters.com@reuters.net
1446 ET 06April2009
Infosys Technologies gets bearish put spreader
U.S. listed shares of Indian information technology company Infosys Technologies Ltd fell 3.13 percent to $28.15 in late trade. Infosys appeared at the top of Interactive Brokers Group's 'hot by options volume' market scanner after one player initiated a ratio put spread in the April contract, said Interactiver Brokers' market analyst Andrew Wilkinson in a note. At the April $25 strike price, 10,000 puts were sold for a premium of 50 cents apiece while 5,000 puts were purchased at the April $27.50 strike for $1.30 each. The net cost of the bearish trade amounted to 30 cents and yields a maximum potential profit of $2.20 if shares fall to $25 by expiration. Shares would need to fall by at least 4 percent from the current price in order to breach the break even point at $27.20, the price at which the investor begins to amass profits on the downside, Wilkinson added.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1412 ET 06April2009-March same
store sales to fall 0.3 pct: TR data
Same-store sales are expected to have dropped 0.3 percent in March, compared with a 0.7 percent drop in March 2008, according to the Thomson Reuters same-store sales index. Almost all the strength is expected to come from discount retailer Wal-Mart Stores. Excluding Wal-Mart, the largest retailer in the index, comparable sales are expected to tumbled 4.7 percent year-over-year.
The discount retail sector is the only group expected to post positive sales growth. When Wal-Mart is included, the group is expected to post growth of 2.6 percent. Excluding Wal-Mart, the sector is expected to report flat sales.
The S&P Retail Index fell 1.9 percent to 308.10 on Monday.
Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net
Keywords: MARKETS STOCKSNEWS
COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
U.S. stock market report
1724 ET-06April2009
China ETF calendar spread looks for rally in 2010
Shares of the iShares FTSE/Xinhua China 25 Index exchange-traded fund fell 1 cent to $30.94. In the options market, one trader enacted a bullish calendar spread, looking for a significant rally in the ETF at the start of 2010, said Interactive Brokers Group analyst Andrew Wilkinson. The investor sold 8,500 calls at the May $32 strike price for an average premium of $1.60 and repurchased 8,500 calls at the January 2010 $40 strike price for $1.70 each. The trader gets a credit of 10 cents for rolling the position forward while bearing the risk that shares rise above $32 as he is short 8,500 calls at the May $32 strike, he said. This trade implies the investor does not see shares rallying above $32 by May expiration but does want to see shares rise by 31 percent to break through the January $40 strike by January expiration.
Meanwhile, traders bought 15,000 puts at the May $25 strike for 60 cents apiece along with some 10,000 puts which traded to the middle of the market at the August $25 strike for $2 each.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
(Corrects RIC in first item to UNP.N)
1649 ET-06April2009
Option traders bet on higher volatility in Union Pacific
Union Pacific Corp option volume was double the normal levels as 11,000 puts and 15,000 calls traded, according to Trade Alert. Shares of railroad fell 4.4 percent to $44.06 after rallying 9.9 percent this past Thursday along with similar gains experienced by other rail companies, said Andrew Wilkinson, market analyst at Interactive Brokers Group. One player seemed to be looking for volatility to increase on the stock with the purchase of a May strangle, he said. At the May $43 strike price, 5,000 puts were bought for $3.70 each along with the purchase of 5,000 calls at the May $44 strike for 3.60 apiece. The net cost of the strangle was $7.30 and yields effective break even points at $35.70 on the downside and at $51.30 on the upside. This investor will begin to make money if shares can swing outside of the break even points. Using a reference price of $44.06, this would require either a rally of 16.4 percent or a decline in shares of 19 percent. Option implied volatility stood at 68 percent, up from Friday's 61 percent reading, he said.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1615 ET 06Apr2009 RTRS-US STOCKS
Wall St ends lower, weighed by bank unease
U.S. stocks ended lower on Monday, halting a four-day run-up, as a warning from a prominent analyst, Calyon's Mike Mayo, rekindled worries about banks, while a potential collapse of a takeover of Sun Microsystems hurt sentiment in the technology sector.
Even so, the market ended well off its worst levels, with some investors encouraged by a reassuring assessment of the bank sector from another closely followed bank analyst, Meredith Whitney. For details, see
For more details, see
Reuters Messaging: ellis.mnyandu.reuters.com@reuters.net
1557 ET 06April2009
Players scoop up TLT calls, likely betting on bond rally
Shares of the Barclays Capital 20+ Year U.S. Treasury Index fell 33 cents to $102.59 in late trade as bonds limp into the close. But some option players seem to be preparing for a big bond rally over the next two weeks, said Frederic Ruffy, options strategist at WhatsTrading.com. The top trade in the exchange-traded fund was 5,000 April $107 calls at the offer for 35 cents traded this morning. ISEE sentiment data on the ISE confirm the trade is an opening call buy. The activity continued throughout the day and 11,219 TLT April $107 calls traded, Reuters data show. The TLT tracks bonds with longer maturities in the Treasury market. Buying calls on the TLT reflects a bullish view on bonds. When the fund's stock price goes up, interest rates and yields are falling while government bond prices are rising. Conversely, the ETF's stock price drops when interest rates and yields rise while bond prices fall.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1458 ET 06April2009
TARP repayments seen hobbling lending, recovery
'Because Congress has now targeted CEO pay, banks are focused on repaying TARP (bailout money) more than lending, even if they have to access capital to do so,' said Marc Pado, U.S. market strategist AT Cantor Fitzgerald & Co in San Francisco.
'Now you're going to have the banks focused on repaying TARP and getting Congress out of their business, rather than spurring the economy.
'They (Congress) have now defeated the very purpose they were injecting the money for in the first place. It's that this is going to stop the economy from recovering, but it's going to certainly slow the pace of the recovery.'
Reuters Messaging rm://ellis.mnyandu.reuters.com@reuters.net
1458 ET 06April2009-Tech sector Q1 job cuts jump 27 pct vs Q4
report
Firms in the United States technology sector announced planned job cuts totaling 84,217 in the first quarter, up 27 percent from 66,312 in the previous quarter.
It was the largest quarterly job-cut tally for the sector since 2002, when 133,511 layoffs were announced in the fourth quarter, according to a report released on Monday by global outplacement firm Challenger, Gray & Christmas, Inc.
Despite the increase, quarterly tech job cuts remain well below the levels reached during the dotcom collapse that resulted in 1,163,742 tech-sector job cuts in 2001 and 2002.
During that period, employers announced an average of 145,467 job cuts each quarter, the outplacement firm added.
Reuters Messaging rm://ellis.mnyandu.reuters.com@reuters.net
1446 ET 06April2009
Infosys Technologies gets bearish put spreader
U.S. listed shares of Indian information technology company Infosys Technologies Ltd fell 3.13 percent to $28.15 in late trade. Infosys appeared at the top of Interactive Brokers Group's 'hot by options volume' market scanner after one player initiated a ratio put spread in the April contract, said Interactiver Brokers' market analyst Andrew Wilkinson in a note. At the April $25 strike price, 10,000 puts were sold for a premium of 50 cents apiece while 5,000 puts were purchased at the April $27.50 strike for $1.30 each. The net cost of the bearish trade amounted to 30 cents and yields a maximum potential profit of $2.20 if shares fall to $25 by expiration. Shares would need to fall by at least 4 percent from the current price in order to breach the break even point at $27.20, the price at which the investor begins to amass profits on the downside, Wilkinson added.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1412 ET 06April2009-March same
store sales to fall 0.3 pct: TR data
Same-store sales are expected to have dropped 0.3 percent in March, compared with a 0.7 percent drop in March 2008, according to the Thomson Reuters same-store sales index. Almost all the strength is expected to come from discount retailer Wal-Mart Stores. Excluding Wal-Mart, the largest retailer in the index, comparable sales are expected to tumbled 4.7 percent year-over-year.
The discount retail sector is the only group expected to post positive sales growth. When Wal-Mart is included, the group is expected to post growth of 2.6 percent. Excluding Wal-Mart, the sector is expected to report flat sales.
The S&P Retail Index fell 1.9 percent to 308.10 on Monday.
Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net
Keywords: MARKETS STOCKSNEWS
COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.