Real-time equity news
U.S. stock market report
1713 ET 07May2010
Investors take mixed views on Greece woes ahead of weekend
U.S. stocks ended lower amid worries Greece's debt crisis could spread. Trading was choppy in the aftermath of Thursday's dramatic drop, keeping many on edge heading into the weekend. The Dow industrials suffered the largest intraday plunge on record on Thursday, temporarily erasing nearly 1,000 points. 'You are seeing a combination of risk management as investors seek options to hedge portfolio risk while others are trying to reduce their exposure by exiting positions,' said Dan Deming, VIX options trader at Stutland Equities. TD Ameritrade chief derivatives strategist Joe Kinahan said: 'My sense is that investors who have larger portfolios, or are willing to ride out this storm, are hedging their positions.' Others, who may have had some gains, are going 'to take a breath and reassess the European debt situation next week. So they are flattening out positions in either futures, options and stocks.' There are also investors who took advantage of elevated volatility to put on new positions. The CBOE Volatility Index ended up at 40.95.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1617 ET 07May2010
Fear is elevated another notch, VIX ends near highs
The CBOE Volatility Index, the implied volatility measure of the S&P 500 index, ended near its April, 2009 high of 42.15 as fears persist over the sovereign debt crisis in Europe. The VIX rose 26.85 percent to $40.95. Typically, the 30-day options risk gauge would retreat a bit as options are repriced for the time decay over the weekend. Instead it pushed higher from 35 over the last hours of trade. 'That speaks to the concerns going into the weekend,' said optionMonster analyst Chris McKhann in comments on the website. 'Not only is uncertainty about Europe's debt problems weighing on sentiment, fear has been elevated another notch after trading activity turned to chaos late Thursday,' said WhatsTrading.com option strategist Frederic Ruffy on the website. 'While the root of the problem is being investigated, the event, which was followed by a nearly 1,000 point drop in the Dow Jones Industrial Average, has clearly undermined investor confidence during already precarious times.'
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1410 ET 07May2010
Option bulls target Forest Labs calls
Traders exchanged about 12,000 calls in drugmaker Forest Laboratories Inc , nearly four times their average daily volume compared with 1,080 puts. Directional sentiment based on order flow was 70 percent bullish, according to Trade Alert.
Its shares rose 2.29 percent to $26.84 in the afternoon session. Near-term bullish options investors engaged in plain-vanilla call buying on Forest Labs with shares trading at $26.58 this morning, said Interactive Brokers Group equity options analyst Caitlin Duffy in a note. Traders focused on the May $27.50 strike where about 6,400 calls were purchased for an average premium of 47 cents apiece. Investors long the calls make money if Forest's shares rally another 4.21 percent to surpass the average break-even price of $27.97 by May expiration. Options implied volatility was higher and rose 24.5 percent to 40.86 percent earlier in the session.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1338 ET 07May2010-S&P 500 14
day RSI at lowest since March 9, 2009
The S&P 500 14-day relative strength index dropped to 31.1 on Friday, just two weeks after hitting an overbought level of 70.8.
The reading is at its lowest since March 9, 2009, when the U.S. stock market hit more than 12-year lows. Back then, the 14-day RSI stood at 27.6, below the 30 level that indicates the market is oversold.
Reuters Messaging: rodrigo.campos.reuters.com@reuters.net
1147 ET 07May2010
Traders circle call options in dollar bull ETF
Traders circled call options in the PowerShares DB US Dollar Index Bullish fund. It shares slipped 4 cents to $24.77. In all, option volume was five times greater than average daily volume with about 69,000 calls vs. 443 puts traded, according to Trade Alert. One trade appeared to be a bullish bet on the dollar. The U.S. greenback rose against the yen after data showed the U.S. economy added jobs last month at the fastest pace in four years, but the euro kept struggling on fear that Greece's debt woes could spread to other countries. WhatsTrading.com option strategist Frederic Ruffy said one notable morning trade in the exchange-traded fund was a block of 45,000 June $25 calls at the 40-cent asking price. It appeared to be a buyer taking a new position and looking for the dollar to strengthen against the other major currencies, Ruffy said.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1136 ET 07May2010
Obama encouraged by jobs, concerned on markets
President Barack Obama on Friday said U.S. regulators are investigating Thursday's 'unusual' stock market plunge and said he had spoken to German Chancellor Angela Merkel about Europe's financial situation.
Obama said in remarks about the U.S. economy that he was encouraged that 290,000 jobs were created in April and said an increase in the jobless rate from 9.7 percent to 9.9 percent was a result of more Americans taking advantage of the improving economy to seek jobs.
'We've got to be mindful that today's job numbers while welcome leave us with a lot of work to do. It's going to take time to achieve the strong and sustained job growth that is necessary,' Obama said to reporters.
For details, see
Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net
1131 ET 07May2010
BMO upgrades Alcoa to 'outperform'
BMO Research on Friday upgraded Alcoa Inc to 'outperform' from 'market perform,' saying a recent drop in the share price had created a buying opportunity.
'The shares are relatively underpriced and provide investors with an opportunity to make some short-term profits as the share price recovers recent losses,' the firm wrote to clients.
BMO kept its $15 price target on the Dow component, whose shares were up 0.3 percent at $11.98.
Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net
1114 07May2010
CBOE VIX briefly hits highest level since April 2009
The CBOE Volatility Index, Wall Street's favorite measure of investor sentiment, briefly hit a new intraday high of 42.15, its highest since April, 2009. It has since come off that level and is sitting at 37.17, up 10.27 percent near midday. Still, the indicator reflects higher risk perceptions. 'The market shrugged off a better-than-expected employment report and appears to be focusing on the European credit crisis, which has kept price movements extremely volatile so far today,' said Scott Fullman, director of derivative investment strategy at WJB Capital Group. Fullman also noted option premiums in VIX options are higher in the front-month May contracts compared to June contracts and beyond. 'This is an indication of relative panic among traders due to the trading over the past two days.' The VIX is a 30-day risk forecast of stock market volatility, conveyed by S&P 500 option prices and generally moves inversely to the S&P 500 benchmark.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1104 ET 07May2010
Cowen starts Microsoft at 'outperform'
Cowen and Company on Friday started Microsoft Corp with an 'outperform' rating, saying new products could make a 'meaningful incremental contribution' to the Dow component's financials.
'We believe Microsoft shares can outperform the market by 15-20 percent over the next 12 months,' the firm wrote to clients.
Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net Keywords: MARKETS STOCKSNEWS
COPYRIGHT Copyright Thomson Reuters 2010. 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
1713 ET 07May2010
Investors take mixed views on Greece woes ahead of weekend
U.S. stocks ended lower amid worries Greece's debt crisis could spread. Trading was choppy in the aftermath of Thursday's dramatic drop, keeping many on edge heading into the weekend. The Dow industrials suffered the largest intraday plunge on record on Thursday, temporarily erasing nearly 1,000 points. 'You are seeing a combination of risk management as investors seek options to hedge portfolio risk while others are trying to reduce their exposure by exiting positions,' said Dan Deming, VIX options trader at Stutland Equities. TD Ameritrade chief derivatives strategist Joe Kinahan said: 'My sense is that investors who have larger portfolios, or are willing to ride out this storm, are hedging their positions.' Others, who may have had some gains, are going 'to take a breath and reassess the European debt situation next week. So they are flattening out positions in either futures, options and stocks.' There are also investors who took advantage of elevated volatility to put on new positions. The CBOE Volatility Index ended up at 40.95.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1617 ET 07May2010
Fear is elevated another notch, VIX ends near highs
The CBOE Volatility Index, the implied volatility measure of the S&P 500 index, ended near its April, 2009 high of 42.15 as fears persist over the sovereign debt crisis in Europe. The VIX rose 26.85 percent to $40.95. Typically, the 30-day options risk gauge would retreat a bit as options are repriced for the time decay over the weekend. Instead it pushed higher from 35 over the last hours of trade. 'That speaks to the concerns going into the weekend,' said optionMonster analyst Chris McKhann in comments on the website. 'Not only is uncertainty about Europe's debt problems weighing on sentiment, fear has been elevated another notch after trading activity turned to chaos late Thursday,' said WhatsTrading.com option strategist Frederic Ruffy on the website. 'While the root of the problem is being investigated, the event, which was followed by a nearly 1,000 point drop in the Dow Jones Industrial Average, has clearly undermined investor confidence during already precarious times.'
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1410 ET 07May2010
Option bulls target Forest Labs calls
Traders exchanged about 12,000 calls in drugmaker Forest Laboratories Inc , nearly four times their average daily volume compared with 1,080 puts. Directional sentiment based on order flow was 70 percent bullish, according to Trade Alert.
Its shares rose 2.29 percent to $26.84 in the afternoon session. Near-term bullish options investors engaged in plain-vanilla call buying on Forest Labs with shares trading at $26.58 this morning, said Interactive Brokers Group equity options analyst Caitlin Duffy in a note. Traders focused on the May $27.50 strike where about 6,400 calls were purchased for an average premium of 47 cents apiece. Investors long the calls make money if Forest's shares rally another 4.21 percent to surpass the average break-even price of $27.97 by May expiration. Options implied volatility was higher and rose 24.5 percent to 40.86 percent earlier in the session.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1338 ET 07May2010-S&P 500 14
day RSI at lowest since March 9, 2009
The S&P 500 14-day relative strength index dropped to 31.1 on Friday, just two weeks after hitting an overbought level of 70.8.
The reading is at its lowest since March 9, 2009, when the U.S. stock market hit more than 12-year lows. Back then, the 14-day RSI stood at 27.6, below the 30 level that indicates the market is oversold.
Reuters Messaging: rodrigo.campos.reuters.com@reuters.net
1147 ET 07May2010
Traders circle call options in dollar bull ETF
Traders circled call options in the PowerShares DB US Dollar Index Bullish fund. It shares slipped 4 cents to $24.77. In all, option volume was five times greater than average daily volume with about 69,000 calls vs. 443 puts traded, according to Trade Alert. One trade appeared to be a bullish bet on the dollar. The U.S. greenback rose against the yen after data showed the U.S. economy added jobs last month at the fastest pace in four years, but the euro kept struggling on fear that Greece's debt woes could spread to other countries. WhatsTrading.com option strategist Frederic Ruffy said one notable morning trade in the exchange-traded fund was a block of 45,000 June $25 calls at the 40-cent asking price. It appeared to be a buyer taking a new position and looking for the dollar to strengthen against the other major currencies, Ruffy said.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1136 ET 07May2010
Obama encouraged by jobs, concerned on markets
President Barack Obama on Friday said U.S. regulators are investigating Thursday's 'unusual' stock market plunge and said he had spoken to German Chancellor Angela Merkel about Europe's financial situation.
Obama said in remarks about the U.S. economy that he was encouraged that 290,000 jobs were created in April and said an increase in the jobless rate from 9.7 percent to 9.9 percent was a result of more Americans taking advantage of the improving economy to seek jobs.
'We've got to be mindful that today's job numbers while welcome leave us with a lot of work to do. It's going to take time to achieve the strong and sustained job growth that is necessary,' Obama said to reporters.
For details, see
Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net
1131 ET 07May2010
BMO upgrades Alcoa to 'outperform'
BMO Research on Friday upgraded Alcoa Inc to 'outperform' from 'market perform,' saying a recent drop in the share price had created a buying opportunity.
'The shares are relatively underpriced and provide investors with an opportunity to make some short-term profits as the share price recovers recent losses,' the firm wrote to clients.
BMO kept its $15 price target on the Dow component, whose shares were up 0.3 percent at $11.98.
Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net
1114 07May2010
CBOE VIX briefly hits highest level since April 2009
The CBOE Volatility Index, Wall Street's favorite measure of investor sentiment, briefly hit a new intraday high of 42.15, its highest since April, 2009. It has since come off that level and is sitting at 37.17, up 10.27 percent near midday. Still, the indicator reflects higher risk perceptions. 'The market shrugged off a better-than-expected employment report and appears to be focusing on the European credit crisis, which has kept price movements extremely volatile so far today,' said Scott Fullman, director of derivative investment strategy at WJB Capital Group. Fullman also noted option premiums in VIX options are higher in the front-month May contracts compared to June contracts and beyond. 'This is an indication of relative panic among traders due to the trading over the past two days.' The VIX is a 30-day risk forecast of stock market volatility, conveyed by S&P 500 option prices and generally moves inversely to the S&P 500 benchmark.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1104 ET 07May2010
Cowen starts Microsoft at 'outperform'
Cowen and Company on Friday started Microsoft Corp with an 'outperform' rating, saying new products could make a 'meaningful incremental contribution' to the Dow component's financials.
'We believe Microsoft shares can outperform the market by 15-20 percent over the next 12 months,' the firm wrote to clients.
Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net Keywords: MARKETS STOCKSNEWS
COPYRIGHT Copyright Thomson Reuters 2010. 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.