Real-time equity news
U.S. stock market report
1717 ET 20Dec2010 Arena Pharma calls become popular, shares up
Option traders exchanged about 38,000 contracts in Arena Pharmaceuticals Inc , 15.1 times greater than its average daily turnover as the stock rose 73 cents to $2.38.
Trade Alert data show about 34,000 calls changed hands against 4,462 puts on Monday. Arena is a stock that typically has light option volume, averaging 1,831 calls per day and 713 puts per day. The January $2, January $2.50, and January $4 calls are the most actives, with about 70 percent trading at the ask price during the session, said WhatsTrading.com options strategist Frederic Ruffy. The stock's option implied volatility rose 2 percent to 114.5 percent, but with no news to explain the surge in the share price or the heavy call buying in the biotech Monday, Ruffy said.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1640 ET 20Dec2010
S&P 500 stock buybacks rebound 128 pct from Q3 '09
Standard & Poor's said preliminary results show that S&P 500 stock buybacks for the third quarter of 2010 increased 128.3 percent to $79.56 billion from the $34.85 billion registered during the third quarter of 2009. The $79.56 billion in share repurchases represents a 2.5 percent increase over the second quarter of 2010, and marks the fifth quarter in a row that S&P500 companies have increased their stock buyback activity.
'The 128 percent increase in share repurchases marks the full return of corporate participation in the equity markets,' says Howard Silverblatt, Senior Index Analyst at S&PIndices. 'While we do not expect a return to the 2005-2007 buyback bonanza, we do see this as a strong, positive sign for the overall health of the market.'
Silverblatt said that over the past three quarters, the number of companies taking part in a stock buyback program has leveled off, with 261 companies purchasing their shares during the third quarter compared to 257 in the second quarter and 251 in the first quarter of this year.
Reuters Messaging rm://caroline.valetkevitch.reuters.com@reuters.net
1640 ET 20Dec2010
Wall Street edges up on energy, financial shares
Stocks tacked on further gains to push the S&P 500 to a two-year high, continuing a steady upward march investors believe will continue in 2011.
Volume was light, as is expected through the rest of 2010. Investors stayed with sectors that have led a sharp December rally, including financials, energy and materials stocks. The S&P 500 is up 5.7 percent for the month and 11.8 percent for the year. For details, see
Reuters Messaging: leah.schnurr.thomsonreuters.com@reuters.net
1559 ET 20Dec2010
Financial ETF put play suggests likely hedge
The Financial Select Sector SPDR Fund was flat at $15.55. In the options, a noteworthy March $14-$13 put ratio spread was transacted at even and traded 25,000 times, analysts said. The investor bought 25,000 March $14 puts at 24 cents and sold twice as many March $13 puts at 12 cents, said Interactive Brokers Group equity options analyst Caitlin Duffy. 'It appears to be a cheap way to hedge exposure in the financial sector or a play by an investor taking a bearish view into next year,' Duffy said. The spread might be a closing position or a roll, as open interest is sufficient to cover in both contracts, said WhatsTrading.com options strategist Frederic Ruffy. If the spread was bought, the trade is possibly looking for the XLF to fall toward $13 per share, the lower strike price, by March expiration. 'Since the fund holds all of the financial-related names from the S&P 500, a fund manager looking to hedge their exposure to that sector might have initiated this massive ratio spread,' said optionsXpress senior market analyst Joe Cusick.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1527 ET 20Dec2010-Abobe options imply 11 pct earnings move
optionMonster
OptionMonster on its website estimated earnings moves using at-the-money straddles for Adobe Systems Inc, Darden Restaurants Inc, Jabil Circuit Inc and Paychex Inc, all due to report quarterly earnings late on Monday.
By looking at Adobe's ATM January $29 straddle, a combination of a call option and a put option with the same strike price and expiration date, optionMonster co-founder Jon Najarian said the options are pricing in a potential up or down move of just under 11 percent. The event has a bullish bias.
Darden's $50 ATM straddle is pricing in a potential move of 7.7 percent in either direction with no bias. Jabil Circuit's ATM $17.50 straddle is implying a 10.7 percent swing, an earnings event with a bullish bias.
And Paychex's January $30 ATM straddle is pricing in an estimated up or down move of 4.8 percent with no bias.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1437 ET 20Dec2010-S&P 500 remains in uptrend, sellers timid
McMillan
The S&P 500 index remains in an uptrend, with support at 1,220, Larry McMillan, president of McMillan Analysis Corp said in a report. The volatility indexes, such as the CBOE Volatility Index, or VIX, remains in downtrends, which is bullish -- despite some anomalies in the way VIX is calculated with more than 35 days remaining until near-term expiration.
VIX futures premiums are coming in a bit, especially the front end. The term structure remains steep and it will stay that way at least through year-end. 'What will be interesting is next week, for if there is really pent-up selling, it sometimes starts in the week between Christmas and New Year's,' he said. 'This happened in 2007.' Usually, there is a 'Santa Claus' rally during the period including the last five trading days of one year and the first two trading days of the next year. But 'if the market falters during that time, it's a warning sign that a bear market lies ahead,' he said.
'The market's action in the past couple of weeks -- steady gains, accompanied by so-so breadth and high VIX futures premium -- is very similar to what happened at the end of 2007. Next week's action should give us a good clue as to which is about to unfold early in the new year -- bull or bear.'
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
1717 ET 20Dec2010 Arena Pharma calls become popular, shares up
Option traders exchanged about 38,000 contracts in Arena Pharmaceuticals Inc , 15.1 times greater than its average daily turnover as the stock rose 73 cents to $2.38.
Trade Alert data show about 34,000 calls changed hands against 4,462 puts on Monday. Arena is a stock that typically has light option volume, averaging 1,831 calls per day and 713 puts per day. The January $2, January $2.50, and January $4 calls are the most actives, with about 70 percent trading at the ask price during the session, said WhatsTrading.com options strategist Frederic Ruffy. The stock's option implied volatility rose 2 percent to 114.5 percent, but with no news to explain the surge in the share price or the heavy call buying in the biotech Monday, Ruffy said.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1640 ET 20Dec2010
S&P 500 stock buybacks rebound 128 pct from Q3 '09
Standard & Poor's said preliminary results show that S&P 500 stock buybacks for the third quarter of 2010 increased 128.3 percent to $79.56 billion from the $34.85 billion registered during the third quarter of 2009. The $79.56 billion in share repurchases represents a 2.5 percent increase over the second quarter of 2010, and marks the fifth quarter in a row that S&P500 companies have increased their stock buyback activity.
'The 128 percent increase in share repurchases marks the full return of corporate participation in the equity markets,' says Howard Silverblatt, Senior Index Analyst at S&PIndices. 'While we do not expect a return to the 2005-2007 buyback bonanza, we do see this as a strong, positive sign for the overall health of the market.'
Silverblatt said that over the past three quarters, the number of companies taking part in a stock buyback program has leveled off, with 261 companies purchasing their shares during the third quarter compared to 257 in the second quarter and 251 in the first quarter of this year.
Reuters Messaging rm://caroline.valetkevitch.reuters.com@reuters.net
1640 ET 20Dec2010
Wall Street edges up on energy, financial shares
Stocks tacked on further gains to push the S&P 500 to a two-year high, continuing a steady upward march investors believe will continue in 2011.
Volume was light, as is expected through the rest of 2010. Investors stayed with sectors that have led a sharp December rally, including financials, energy and materials stocks. The S&P 500 is up 5.7 percent for the month and 11.8 percent for the year. For details, see
Reuters Messaging: leah.schnurr.thomsonreuters.com@reuters.net
1559 ET 20Dec2010
Financial ETF put play suggests likely hedge
The Financial Select Sector SPDR Fund was flat at $15.55. In the options, a noteworthy March $14-$13 put ratio spread was transacted at even and traded 25,000 times, analysts said. The investor bought 25,000 March $14 puts at 24 cents and sold twice as many March $13 puts at 12 cents, said Interactive Brokers Group equity options analyst Caitlin Duffy. 'It appears to be a cheap way to hedge exposure in the financial sector or a play by an investor taking a bearish view into next year,' Duffy said. The spread might be a closing position or a roll, as open interest is sufficient to cover in both contracts, said WhatsTrading.com options strategist Frederic Ruffy. If the spread was bought, the trade is possibly looking for the XLF to fall toward $13 per share, the lower strike price, by March expiration. 'Since the fund holds all of the financial-related names from the S&P 500, a fund manager looking to hedge their exposure to that sector might have initiated this massive ratio spread,' said optionsXpress senior market analyst Joe Cusick.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1527 ET 20Dec2010-Abobe options imply 11 pct earnings move
optionMonster
OptionMonster on its website estimated earnings moves using at-the-money straddles for Adobe Systems Inc, Darden Restaurants Inc, Jabil Circuit Inc and Paychex Inc, all due to report quarterly earnings late on Monday.
By looking at Adobe's ATM January $29 straddle, a combination of a call option and a put option with the same strike price and expiration date, optionMonster co-founder Jon Najarian said the options are pricing in a potential up or down move of just under 11 percent. The event has a bullish bias.
Darden's $50 ATM straddle is pricing in a potential move of 7.7 percent in either direction with no bias. Jabil Circuit's ATM $17.50 straddle is implying a 10.7 percent swing, an earnings event with a bullish bias.
And Paychex's January $30 ATM straddle is pricing in an estimated up or down move of 4.8 percent with no bias.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1437 ET 20Dec2010-S&P 500 remains in uptrend, sellers timid
McMillan
The S&P 500 index remains in an uptrend, with support at 1,220, Larry McMillan, president of McMillan Analysis Corp said in a report. The volatility indexes, such as the CBOE Volatility Index, or VIX, remains in downtrends, which is bullish -- despite some anomalies in the way VIX is calculated with more than 35 days remaining until near-term expiration.
VIX futures premiums are coming in a bit, especially the front end. The term structure remains steep and it will stay that way at least through year-end. 'What will be interesting is next week, for if there is really pent-up selling, it sometimes starts in the week between Christmas and New Year's,' he said. 'This happened in 2007.' Usually, there is a 'Santa Claus' rally during the period including the last five trading days of one year and the first two trading days of the next year. But 'if the market falters during that time, it's a warning sign that a bear market lies ahead,' he said.
'The market's action in the past couple of weeks -- steady gains, accompanied by so-so breadth and high VIX futures premium -- is very similar to what happened at the end of 2007. Next week's action should give us a good clue as to which is about to unfold early in the new year -- bull or bear.'
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.