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U.S. stock market report 1627 ET 09Mar2010 GameStop gets big option volatility play

GameStop Corp fell 2.22 percent to $18.06. In its options, a big volatility play on the U.S. videogame retailer was enacted where one investor bought a near-term strangle and simultaneously sold longer-dated calls betting the stock won't experience major moves after April expiration, said Jud Pyle, chief investment strategist at www.ONN.tv. The player bought the April $17-$19 strangle 10,000 times for $1.30 per spread and at the same time sold 20,000 July $21 calls for 75 cents apiece. On a net premium basis, the investor paid a net debit of $1.3 million for the strangle and collected $1.5 million for the calls, resulting in a total net credit of $200,000 for the trade. The investor will make a profit of $2.2 million if shares close right at $21 at July expiration. But it is more likely the investor will not wait until even April expiration to realize some profit, he said. That is because GameStop is due to report earnings on March 18. Should the stock make a big move down following earnings, the trade will be profitable.

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1608 ET 09Mar2010-US STOCKS SNAPSHOT
Market ends up slightly; telecoms help

U.S. stocks ended slightly higher on Tuesday, helped by gains in the telecom and industrial sectors, though the advance was limited by falling commodity prices that pressured materials shares. The market's mild finish came on the first anniversary of its drop to 12-year closing lows on March 9, 2009.

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1457 ET 09Mar2010
Fannie, Freddie, Citi, AIG lead day's volume

Traded volume in the shares of Fannie Mae, Freddie Mac, American International Group and Citigroup accounted for about 15 percent of Tuesday's consolidated volume as these stocks ran up amid speculation that regulators could consider clamping down on their short sales.

With about 6.83 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq by mid-afternoon, overall volume tracked for what could be the weakest total volume so far in 2010.

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1416 ET 09Mar2010 RTRS-Barclays looking for U.S. retail bank to buy
WSJ

British bank Barclays Plc is looking to buy a retail bank in the United States to extend its presence after buying Lehman Brothers' North American operations in 2008, the Wall Street Journal reported on Tuesday, citing people close to the matter.

According to the report, the bank is not in talks with any U.S. banks and no deals are imminent. But Barclays has designated an internal team to assess possible targets and is looking for a franchise with a strong branch network and deposit base, the Journal said.

U.S.-listed shares of Barclays were up 0.6 percent at $20.85 on the New York Stock Exchange.

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1229 ET 09Mar2010-S&P 500 fair value 1,250 to 1,300
Goldman's Cohen

Goldman Sachs investment strategist Abby Joseph Cohen said on Tuesday her team's in-house view put the S&P 500 stock index's fair value at between 1,250 and 1,300.

Speaking in an interview on CNBC television, Cohen said equities probably offered better returns and valuations relative to bonds and it was unlikely that the U.S. economy will slip right back into a recession.

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1225 ET 09Mar2010
Commercial Metals shares, options move on takeover talk

Shares of Commercial Metals Co jumped as much as 8 percent and its option volume surged amid renewed speculation the steel and metal products maker was an acquisition target.

'There was takeover speculation early this morning,' said WhatsTrading.com option strategist Frederic Ruffy. 'The stock has been the subject of takeover chatter in the past.'

Its shares rose 7.38 percent to $17.45 after hitting a high of $17.62. In the options market, a number of investors established bullish positions as about 42,000 call options traded. In all, option traders exchanged about 47,000 contracts, six times the norm by early afternoon, according to Trade Alert. The most popular calls were the March $17.50 and April $20 strikes. The demand for options sent its options implied volatility to its highest point since late June 2009, said Interactive Brokers Group options analyst Caitlin Duffy. Duffy did not know what was the catalyst driving the action.

Calls to the company were not immediately returned.

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1140 ET 09March2010
Too soon for spending clampdown: Romer

The gaping U.S. budget deficit is cause for concern but clamping down on spending immediately would be 'pound-foolish' and derail the recovery, a top White House economic adviser said on Tuesday.

Christina Romer, who heads the Council of Economic Advisers, said cutting back now 'would inevitably nip the nascent economic recovery in the bud -- just as fiscal and monetary contraction in 1936 and 1937 led to a second severe recession before the recovery from the Great Depression was complete.'

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1127 ET 09March2010
Airlines eye profitability measures, shares up

Airline shares rose on Tuesday, with the Arca Airline index up 4 percent as major U.S. carriers said they would continue to explore new fees and cost-cutting measures to enhance profitability, while demand for air travel among business customers is picking up. For details see

AMR Corp, parent of American Airlines, rose 9.7 percent to $9.81 and Continental Airlines gained 5.9 percent to $21.41.

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