Real-time equity news
U.S. stock market report
1734 ET 8Dec2010
US earnings diary for Thursday
Companies expected to report quarterly results on Thursday include Brown-Forman Corp, National Semiconductor and Pall Corp .
Reuters Messaging: rodrigo.campos.thomsonreuters.com@reuters.net
1721 ET 8Dec2010
US economic indicators for Thursday
Economic indicators on tap for Thursday include the Labor Department's release of first-time claims for unemployment insurance for the week ended Dec. 4 at 8:30 a.m. EST (1330 GMT). Economists in a Reuters survey forecast a total of 425,000 new filings compared with 436,000 in the prior week.
At 10 a.m. EST, the Commerce Department releases wholesale inventories for October. A Reuters survey forecast inventories up 0.9 percent following a rise of 1.5 percent in September.
Reuters Messaging: rodrigo.campos.thomsonreuters.com@reuters.net
1700 ET 8Dec2010
Goldman Sachs recommends National Semi January straddles
Goldman Sachs advised clients to buy a January straddle on National Semiconductor Corp to reduce risk heading into the chipmaker's earnings on Thursday. 'Uncertainty is high for shares,' wrote GS equity derivative strategists in a report. GS semiconductor analysis is bearish on fundamentals, but shares have underperformed and may be seen as a laggard that could benefit from an acceleration in economic growth. Goldman said a divergence in fundamentals and stock performance has created increased uncertainty for investors and sees NSM options as an inexpensive way to insure against these erratic moves. With shares at $14.70, the strategists recommend buying NSM $15 January straddles for $1.40. They estimate shares would only need to move 4 percent in either direction on earnings to profit on these straddles if implied volatility falls its typical 13 percent on the day after earnings. National Semi options are pricing in lower than normal volatility ahead of earnings. Typically, earnings implied moves are much higher than eight-quarter medians for the average stock. But Goldman estimates NSM options imply a 5 percent earnings day move vs a 5.5 percent median day move over the past eight quarters.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1605 ET 8Dec2010-Microsoft longer
dated calls grabs interest
Huge blocks of out-of-the-money calls with longer-term expirations known as LEAPS traded on Microsoft Corp. The stock rose 1.34 percent to $27.23. 'Some of this call activity may be related to an interest rate play on Microsoft shares as the software company sits on massive amounts of cash,' said TD Ameritrade chief derivatives strategist Joe Kinahan. For the second straight day, the stock attracted bullish option activity with overall volume 2.4 times greater than typical levels. Trade Alert data show about 207,000 calls and 63,000 puts changed hands on Microsoft. WhatsTrading.com options strategist Frederic Ruffy noticed in the January 2012 $37.50 strike call a block of 67,343 contracts traded at the ask price. The strike's volume expanded to 79,960 contracts, according to Trade Alert. In the 2013 January $35 strike calls a block of 39,750 traded at the ask price. That strike now has traded 40,029 times. Open interest was sufficient to cover in both but these appear to be opening purchases, he said. Also notable is July 2011 activity in which the $29 call traded 13,000 times in what appears to be an opening purchase. The action is similar to Tuesday when a block of 50,000 Jan 2012 $32.50 calls and 8,100 July $28 calls were bought, he said.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1456 ET 8Dec2010-BlackRock's Doll: Mid-, small
caps to outperform
U.S. mid- and small-capitalization stocks should continue to outperform the big-cap market next year as economic growth picks up, Bob Doll, chief equity strategist at BlackRock, said on Wednesday.
Earnings growth among mid- and small-caps should be strong enough to keep valuations attractive, Doll told the Reuters 2011 Investment Outlook Summit.
Doll, who favors U.S. stocks over other developed country markets on expectations U.S. economic growth will outstrip that of its peers, said he expects to see the stock market follow traditional trends as the economy strengthens.
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Reuters Messaging: caroline.valetkevitch.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
1734 ET 8Dec2010
US earnings diary for Thursday
Companies expected to report quarterly results on Thursday include Brown-Forman Corp, National Semiconductor and Pall Corp .
Reuters Messaging: rodrigo.campos.thomsonreuters.com@reuters.net
1721 ET 8Dec2010
US economic indicators for Thursday
Economic indicators on tap for Thursday include the Labor Department's release of first-time claims for unemployment insurance for the week ended Dec. 4 at 8:30 a.m. EST (1330 GMT). Economists in a Reuters survey forecast a total of 425,000 new filings compared with 436,000 in the prior week.
At 10 a.m. EST, the Commerce Department releases wholesale inventories for October. A Reuters survey forecast inventories up 0.9 percent following a rise of 1.5 percent in September.
Reuters Messaging: rodrigo.campos.thomsonreuters.com@reuters.net
1700 ET 8Dec2010
Goldman Sachs recommends National Semi January straddles
Goldman Sachs advised clients to buy a January straddle on National Semiconductor Corp to reduce risk heading into the chipmaker's earnings on Thursday. 'Uncertainty is high for shares,' wrote GS equity derivative strategists in a report. GS semiconductor analysis is bearish on fundamentals, but shares have underperformed and may be seen as a laggard that could benefit from an acceleration in economic growth. Goldman said a divergence in fundamentals and stock performance has created increased uncertainty for investors and sees NSM options as an inexpensive way to insure against these erratic moves. With shares at $14.70, the strategists recommend buying NSM $15 January straddles for $1.40. They estimate shares would only need to move 4 percent in either direction on earnings to profit on these straddles if implied volatility falls its typical 13 percent on the day after earnings. National Semi options are pricing in lower than normal volatility ahead of earnings. Typically, earnings implied moves are much higher than eight-quarter medians for the average stock. But Goldman estimates NSM options imply a 5 percent earnings day move vs a 5.5 percent median day move over the past eight quarters.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1605 ET 8Dec2010-Microsoft longer
dated calls grabs interest
Huge blocks of out-of-the-money calls with longer-term expirations known as LEAPS traded on Microsoft Corp. The stock rose 1.34 percent to $27.23. 'Some of this call activity may be related to an interest rate play on Microsoft shares as the software company sits on massive amounts of cash,' said TD Ameritrade chief derivatives strategist Joe Kinahan. For the second straight day, the stock attracted bullish option activity with overall volume 2.4 times greater than typical levels. Trade Alert data show about 207,000 calls and 63,000 puts changed hands on Microsoft. WhatsTrading.com options strategist Frederic Ruffy noticed in the January 2012 $37.50 strike call a block of 67,343 contracts traded at the ask price. The strike's volume expanded to 79,960 contracts, according to Trade Alert. In the 2013 January $35 strike calls a block of 39,750 traded at the ask price. That strike now has traded 40,029 times. Open interest was sufficient to cover in both but these appear to be opening purchases, he said. Also notable is July 2011 activity in which the $29 call traded 13,000 times in what appears to be an opening purchase. The action is similar to Tuesday when a block of 50,000 Jan 2012 $32.50 calls and 8,100 July $28 calls were bought, he said.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1456 ET 8Dec2010-BlackRock's Doll: Mid-, small
caps to outperform
U.S. mid- and small-capitalization stocks should continue to outperform the big-cap market next year as economic growth picks up, Bob Doll, chief equity strategist at BlackRock, said on Wednesday.
Earnings growth among mid- and small-caps should be strong enough to keep valuations attractive, Doll told the Reuters 2011 Investment Outlook Summit.
Doll, who favors U.S. stocks over other developed country markets on expectations U.S. economic growth will outstrip that of its peers, said he expects to see the stock market follow traditional trends as the economy strengthens.
For more please double click
Reuters Messaging: caroline.valetkevitch.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.