Daily Commentary from SIR Highlights the Following Stocks: Cisco Systems, XM Satellite Radio, Target, Pier 1 Imports, Brinker International.

Business Editors

CINCINNATI--(BUSINESS WIRE)--Nov. 6, 2003

This daily report contains a brief commentary on the day's most notable activity and a table listing the most active calls and puts for the day. The Midday Options Update is published every day at SchaeffersResearch.com . For additional information about this report or to have it delivered to you via email everyday click on the following link: http://www.schaeffersresearch.com/addinfo .

Today's Daily Commentary focuses on: Cisco Systems (Nasdaq:CSCO), XM Satellite Radio (Nasdaq:XMSR), Target (NYSE:TGT), Pier 1 Imports (NYSE:PIR), Brinker International (NYSE:EAT).

The mood on Wall Street matched the gray skies that are hanging low over Cincinnati this afternoon. Even the positive news from the Labor Department has only begun to lift spirits. For the latest week, initial jobless claims plunged by 43,000 to 348,000 - taking claims down to pre-recession levels. And while this is good news, everyone remains focused on Friday's unemployment number for October. In other economic news, third-quarter productivity in the non-farm business sector rose 8.1 percent, coming in just shy of the Street estimate of 8.7 percent. However, the second-quarter figure was revised higher from 6.8 to 7.0 percent.

On the tech front, positive earnings from Cisco Systems (Nasdaq:CSCO) have failed to buoy traders. The company posted a first-quarter profit of 15 cents per share after the close yesterday. Excluding items, the firm earned 17 cents per share, besting the Street by two cents per share. Revenue for the quarter rose five percent to $5.1 billion. XM Satellite Radio (Nasdaq:XMSR) hit a new 52-week high today after announcing a loss of $1.12 for the previous quarter, which is in line with the consensus estimate. Net subscribers surged 34 percent over the second quarter.

The retail sector is seeing some brisk trading this afternoon with the release of October same-store sales. Target (NYSE:TGT) posted a same-stores sales increase of 1.6 percent, coming in short of the Street estimate of 2.8 percent. Kohl's saw comparable-store sales plunge 11.6 percent for the month, missing the consensus forecast of a 6.5-percent decline. Meanwhile Pier 1 Imports (NYSE:PIR) saw sales rise 1.6 percent, trumping expectations for a 0.9-percent drop. The company also went on to raise earnings guidance for the third quarter.

At 2:02 p.m. eastern time, the Dow Jones Industrial Average  (DJIA - 9830.2) is up 0.10 percent and the S&P 500 Index (SPX - 1054.47) is higher by 0.25 percent. The Nasdaq Composite (COMP - 1971.4) is up 0.61 percent. At 2:03 p.m. in the options pits, 1,409,504 calls and 1,005,682 puts traded for a composite put/call ratio across all five exchanges of 0.71. The CBOE put/call ratio for equity options weighed in at 0.76.

Ever met friends at any one of the casual restaurants that populate the city? Well, there's a good chance that you have dined at one of those owned by Brinker International (NYSE:EAT). According to Hoovers.com, EAT is the number two casual-dining restaurant operator, with such restaurants under its belt as Chili's Grill & Bar, Romano's Macaroni Grill, On The Border Mexican Grill & Cantina, Big Bowl Asian Kitchen, and Corner Bakery Cafe. The stock is the center of some heavy put trading this afternoon, with 5,500 contracts crossing the tape on its November 30 put. Its hard to say if this is the initiation of a sizable new position considering that open interest at this strike sits at 5,546 contracts.

Overall, sentiment toward the shares is pessimistic. The equity's Schaeffer's put/call open interest ratio has risen from 1.42 on October 24 to its current reading of 5.51. Options players should be wary though, as options are lightly traded on this security. However, short interest is more than four times its average daily trading volume, providing ample fuel for a potential covering rally. Only Wall Street is enamored of EAT, with 13 of the 21 analysts following the company rating it a "buy" or better. In addition, one brokerage firm reiterated its rating of "market perform" today.

Since the stock's gap lower on October 21, the security has been headed steadily higher, filling in the gap and moving back above its 10-day and 20-day moving averages. The equity received a boost today after reporting October same-store sales of 1.8 percent and reaffirming its second-quarter earnings guidance of 44-45 cents per share. The stock may have further room to run as the existing pessimism unwinds in the face of its continued technical strength.

Click the following link to see the Daily Chart of EAT since September 2003 with 10-Day and 20-Day Moving Averages:

http://www.schaeffersresearch.com/wire?ID=8821.