Real-time equity news
U.S. stock market report
1728 ET 3May2011
Option traders take cautious view in top ETFs
Option traders appear to be taking a cautious stance in the tech-heavy PowerShares QQQ Trust and the SPDR S&P 500 Trust. In the QQQ, an investor paid $1.55 for the August $52-$58 put spread, which traded 46,000 times, said WhatsTrading.com options strategist Frederic Ruffy. Ruffy noted the spread, which appears to be an an opening position, has a delta of minus 0.27 and is likely a short-term hedge. The QQQ notched a new high of $59.34 early on Monday, but gave up the day's gains and fell another 28 cents to $58.69 on Tuesday.
In the SPY, which slipped 54 cents to $135.71, a notable put spread was transacted. In this trade, the investor sold 42,000 June $125 puts at 60 cents. They also bought 21,000 June $130 puts at $1.21 and bought 21,000 June $120 puts at 34 cents. In other words, they bought the June $120-$125-$130 put butterfly spread at 35 cents, 21,000 times, said Joe Cusick, senior market analyst at optionsXpress. The spread traded more than once. 'It's a bearish play or perhaps hedging activity,' Cusick said. 'The spread offers a maximum pay-off if shares fall to $125 through the June expiration, which represents an 8 percent decline in the S&P 500 over the next 45 days.'
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1700 ET 3May2011-BofA Merril Lynch see mega
cap tech strength
Mega-cap tech shares offer some of the best bets for investors during the summer months, according to strategists at Bank of America Merrill Lynch.
'Since beginning 2011 we have advised positioning for an earnings-led rally that takes the S&P 500 to the 1350-1400 range during 1Q reporting. Beyond
1,400, we believe the risks of an oil and interest
rate shock need to dissipate. A summer that brings with it an end to QE, benign interest rates, a stable dollar, and oil prices not setting new records could set the stage for a strong year-end rally. During the summer, while 'waiting and watching,' we find mega-cap tech most attractive,' they wrote.
They noted that BofA Merrill Lynch economists forecast business equipment and software spending growth of 10-11 percent in 2011-12.
Reuters Messaging: caroline.valetkevitch.reuters.com@reuters.net
1640 ET 3May2011-Technicals point to market breather
strategist
The market's recent gains have brought it to where it needed a breather, according to Chris Burba, short-term market technician at Standard & Poor's in New York.
'The Nasdaq got just above its 2008 high (last week), and ... it held up for three sessions, but it couldn't really extend gains and there were a lot of readings saying momentum was weakening,'
'What happens when you get above a prior high and the market stalls instead of following through higher, essentially that's telling you there's an absence of demand at a natural place to expect that,' he said.
But he doesn't see signs that a downward move will be long term.
'Unless something else changes, I'm treating it as a buying opportunity.'
Reuters Messaging: caroline.valetkevitch.reuters.com@reuters.net Keywords: MARKETS STOCKSNEWS
COPYRIGHT Copyright Thomson Reuters 2011. 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
1728 ET 3May2011
Option traders take cautious view in top ETFs
Option traders appear to be taking a cautious stance in the tech-heavy PowerShares QQQ Trust and the SPDR S&P 500 Trust. In the QQQ, an investor paid $1.55 for the August $52-$58 put spread, which traded 46,000 times, said WhatsTrading.com options strategist Frederic Ruffy. Ruffy noted the spread, which appears to be an an opening position, has a delta of minus 0.27 and is likely a short-term hedge. The QQQ notched a new high of $59.34 early on Monday, but gave up the day's gains and fell another 28 cents to $58.69 on Tuesday.
In the SPY, which slipped 54 cents to $135.71, a notable put spread was transacted. In this trade, the investor sold 42,000 June $125 puts at 60 cents. They also bought 21,000 June $130 puts at $1.21 and bought 21,000 June $120 puts at 34 cents. In other words, they bought the June $120-$125-$130 put butterfly spread at 35 cents, 21,000 times, said Joe Cusick, senior market analyst at optionsXpress. The spread traded more than once. 'It's a bearish play or perhaps hedging activity,' Cusick said. 'The spread offers a maximum pay-off if shares fall to $125 through the June expiration, which represents an 8 percent decline in the S&P 500 over the next 45 days.'
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1700 ET 3May2011-BofA Merril Lynch see mega
cap tech strength
Mega-cap tech shares offer some of the best bets for investors during the summer months, according to strategists at Bank of America Merrill Lynch.
'Since beginning 2011 we have advised positioning for an earnings-led rally that takes the S&P 500 to the 1350-1400 range during 1Q reporting. Beyond
1,400, we believe the risks of an oil and interest
rate shock need to dissipate. A summer that brings with it an end to QE, benign interest rates, a stable dollar, and oil prices not setting new records could set the stage for a strong year-end rally. During the summer, while 'waiting and watching,' we find mega-cap tech most attractive,' they wrote.
They noted that BofA Merrill Lynch economists forecast business equipment and software spending growth of 10-11 percent in 2011-12.
Reuters Messaging: caroline.valetkevitch.reuters.com@reuters.net
1640 ET 3May2011-Technicals point to market breather
strategist
The market's recent gains have brought it to where it needed a breather, according to Chris Burba, short-term market technician at Standard & Poor's in New York.
'The Nasdaq got just above its 2008 high (last week), and ... it held up for three sessions, but it couldn't really extend gains and there were a lot of readings saying momentum was weakening,'
'What happens when you get above a prior high and the market stalls instead of following through higher, essentially that's telling you there's an absence of demand at a natural place to expect that,' he said.
But he doesn't see signs that a downward move will be long term.
'Unless something else changes, I'm treating it as a buying opportunity.'
Reuters Messaging: caroline.valetkevitch.reuters.com@reuters.net Keywords: MARKETS STOCKSNEWS
COPYRIGHT Copyright Thomson Reuters 2011. 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.