Real-time equity news
U.S. stock market report
1710 ET 16July2010
Halliburton momentum wilts ahead of earnings
Halliburton's upward momentum seems to be losing strength heading into its earnings release on Monday as the stock traded in a tight range last week after hitting an eight-week high.
The share's moving average convergence-divergence is still showing a 'buy,' as it has for more than a month, and it is holding above the signal line in that chart. But a recent pierce through its upper Bollinger band may be an indication of downward pressure.
The charts show support near $26.50 --coinciding Fibonacci retracements of large moves -- 3.7 percent below its current price. Resistance can be seen around $29, about 5.3 percent above Friday's close.
Halliburton shares closed down 2 percent at $27.53 on Friday and fell 3.9 percent for the week.
Reuters Messaging: rodrigo.campos.reuters.com@reuters.net
1700 ET 16July2010
Faltering consumers, weak revenues hit Wall St
Dismal consumer sentiment data and anemic revenues from GE and two big banks slammed U.S. stocks on Friday, driving down major indexes more than 2 percent.
The slide in the S&P 500 was a decisive break of an 8 percent rise over the last two weeks as investors lost hope that strong earnings could overcome doubts about the economic outlook.
Reuters Messaging: leah.schnurr.reuters.com@reuters.net
1630 ET 16July2010
Analyst suggests buy U.S. Steel volatility
U.S. Steel Corp's shares have been on a painful slide since peaking in early April, said Dave Klein, senior research analyst at Credit Derivatives Research. He noted the company's CDS levels roughly doubled since then as well.
'Our empirical model finds X's implied volatility trading too low given current CDS levels,' he said in a report. 'Our directional model also points to higher volatility given the company's weak interest coverage and free cash flow.'
With U.S. Steel's implied volatility trading too low compared to both its peers and its credit level, now is a good time to buy volatility in the company, especially ahead of quarterly earnings due on July 27. Klein recommends buying U.S. Steel's January 2011 $41/$42 strangles which stood at a volatility reading of 52 percent as of Friday's close. Klein looks at equity implied volatility from a credit perspective by considering both market and fundamental factors.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1553 ET 16July2010
Spot VIX is up, but contango reigns
The CBOE Volatility Index, Wall Street's favorite yardstick of invester sentiment, rose 7.24 percent as U.S. stocks declined sharply. But the so-called VIX, a 30-day risk forecast of stock market volatility, moved off its highs even as the underlying S&P 500 index hit new lows. The VIX topped a reading of 28 briefly but sits at 26.98 as the SPX fell 2.89 percent to 1,064.78. The move is likely related to the repricing of the SPX options to account for the time decay of the weekend, said optionMonster analyst Chris McKhann in comments on the website. VIX futures moved higher with July futures at 29.20, August futures at 31.05 and September futures at 33.05. This shows the continued sharp rise in the futures price over the spot VIX - known as contango or an upward sloping term structure. This indicates traders expect continued and increased volatiility going forward, he said. July futures and the July VIX options expire next week, and not with this Friday's expiration. Real volatility in the SPX remained reasonably low coming into today, with the
20
day reading down at 20 percent, the lowest level in a month, he said.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1535 ET 16July2010
Players load up on McClatchy call options
Newspaper publisher McClatchy Co fell 7.73 percent to $3.46 late in the session. The shares fell this morning likely in sympathy with Gannett Co Inc shares which are down after the nation's largest newspaper publisher reported an unexpected decline in revenue.
Meanwhile, McClatchy options volume has surged with about 14,000 calls traded, according to Trade Alert. Some players were buying to open August $4 and January $5 calls, said WhatsTrading.com option strategist Frederic Ruffy.
The August $4 series traded 5,010 times and the Jan $5 series, 8,550 times. Volume exceeded the current open interest and ISEE data -- at 3,150 contracts or 97 percent of the call volume -- on the International Securities Exchange, confirm that customers are new positions. MNI implied option volatility is sharply higher as well, up 17 percent to 117 percent as it appears that some option players are bracing for some sort of catalyst to lift the stock in the weeks ahead, Ruffy said.
Reuters Messaging: doris.frankel.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
1710 ET 16July2010
Halliburton momentum wilts ahead of earnings
Halliburton's upward momentum seems to be losing strength heading into its earnings release on Monday as the stock traded in a tight range last week after hitting an eight-week high.
The share's moving average convergence-divergence is still showing a 'buy,' as it has for more than a month, and it is holding above the signal line in that chart. But a recent pierce through its upper Bollinger band may be an indication of downward pressure.
The charts show support near $26.50 --coinciding Fibonacci retracements of large moves -- 3.7 percent below its current price. Resistance can be seen around $29, about 5.3 percent above Friday's close.
Halliburton shares closed down 2 percent at $27.53 on Friday and fell 3.9 percent for the week.
Reuters Messaging: rodrigo.campos.reuters.com@reuters.net
1700 ET 16July2010
Faltering consumers, weak revenues hit Wall St
Dismal consumer sentiment data and anemic revenues from GE and two big banks slammed U.S. stocks on Friday, driving down major indexes more than 2 percent.
The slide in the S&P 500 was a decisive break of an 8 percent rise over the last two weeks as investors lost hope that strong earnings could overcome doubts about the economic outlook.
Reuters Messaging: leah.schnurr.reuters.com@reuters.net
1630 ET 16July2010
Analyst suggests buy U.S. Steel volatility
U.S. Steel Corp's shares have been on a painful slide since peaking in early April, said Dave Klein, senior research analyst at Credit Derivatives Research. He noted the company's CDS levels roughly doubled since then as well.
'Our empirical model finds X's implied volatility trading too low given current CDS levels,' he said in a report. 'Our directional model also points to higher volatility given the company's weak interest coverage and free cash flow.'
With U.S. Steel's implied volatility trading too low compared to both its peers and its credit level, now is a good time to buy volatility in the company, especially ahead of quarterly earnings due on July 27. Klein recommends buying U.S. Steel's January 2011 $41/$42 strangles which stood at a volatility reading of 52 percent as of Friday's close. Klein looks at equity implied volatility from a credit perspective by considering both market and fundamental factors.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1553 ET 16July2010
Spot VIX is up, but contango reigns
The CBOE Volatility Index, Wall Street's favorite yardstick of invester sentiment, rose 7.24 percent as U.S. stocks declined sharply. But the so-called VIX, a 30-day risk forecast of stock market volatility, moved off its highs even as the underlying S&P 500 index hit new lows. The VIX topped a reading of 28 briefly but sits at 26.98 as the SPX fell 2.89 percent to 1,064.78. The move is likely related to the repricing of the SPX options to account for the time decay of the weekend, said optionMonster analyst Chris McKhann in comments on the website. VIX futures moved higher with July futures at 29.20, August futures at 31.05 and September futures at 33.05. This shows the continued sharp rise in the futures price over the spot VIX - known as contango or an upward sloping term structure. This indicates traders expect continued and increased volatiility going forward, he said. July futures and the July VIX options expire next week, and not with this Friday's expiration. Real volatility in the SPX remained reasonably low coming into today, with the
20
day reading down at 20 percent, the lowest level in a month, he said.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1535 ET 16July2010
Players load up on McClatchy call options
Newspaper publisher McClatchy Co fell 7.73 percent to $3.46 late in the session. The shares fell this morning likely in sympathy with Gannett Co Inc shares which are down after the nation's largest newspaper publisher reported an unexpected decline in revenue.
Meanwhile, McClatchy options volume has surged with about 14,000 calls traded, according to Trade Alert. Some players were buying to open August $4 and January $5 calls, said WhatsTrading.com option strategist Frederic Ruffy.
The August $4 series traded 5,010 times and the Jan $5 series, 8,550 times. Volume exceeded the current open interest and ISEE data -- at 3,150 contracts or 97 percent of the call volume -- on the International Securities Exchange, confirm that customers are new positions. MNI implied option volatility is sharply higher as well, up 17 percent to 117 percent as it appears that some option players are bracing for some sort of catalyst to lift the stock in the weeks ahead, Ruffy said.
Reuters Messaging: doris.frankel.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.