Daily Commentary from SIR Highlights the Following Stocks: Conexant Systems, Exelon, Electronics Boutique, Kellogg's, Pfizer.

Business Editors

CINCINNATI--(BUSINESS WIRE)--Nov. 3, 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: Conexant Systems (NASDAQ:CNXT), Exelon (NYSE:EXC), Electronics Boutique (NASDAQ:ELBO), Kellogg's (NYSE:K), Pfizer (NYSE:PFE).

The major market indexes are chugging higher this afternoon following some positive economic news. The October Institute of Supply Management reading came in at 57, marking the fourth consecutive month of growth. The Street had been anticipating a more modest increase to 55.4. U.S. construction projects also rose by 1.3 percent in September compared to the consensus estimate of a 0.4-percent jump. The chip sector received a boost as well, with September sales soaring 6.5 percent to $14.4 billion.

Checking in on corporate news, Conexant Systems (NASDAQ:CNXT) announced plans to acquire GlobespanVitara for approximately $969.5 million. Exelon (NYSE:EXC) also reported intentions to buy Dynegy's Illinois Power utility for roughly $2.23 billion. Meanwhile, Electronics Boutique (NASDAQ:ELBO) has plummeted nearly 20 percent after slashing its third-quarter earnings forecast to five-six cents per share compared to previous estimates of 14-18 cents per share. However, Kellogg's (NYSE:K) managed to please the Street after posting a third-quarter profit that exceeded the consensus estimate by four cents per share. Revenue for the quarter soared 6.8 percent to $2.28 billion.

At 2:09 p.m. eastern time, the Dow Jones Industrial Average (DJIA - 9858.7) is up 0.59 percent and the S&P 500 Index (SPX - 1057.88) is higher by 0.68 percent. The Nasdaq Composite (COMP - 1962.0) is up by 1.57 percent. At 2:11 p.m. in the options pits, 1,628,144 calls and 918,337 puts traded for a composite put/call ratio across all five exchanges of 0.56. The CBOE put/call ratio for equity options weighed in at 0.46.

Pfizer (NYSE:PFE) is making an appearance on our most-active calls list this afternoon. The security's January 2004 35 call has seen more than 5,500 contracts change hands while almost 9,000 contracts have crossed the tape at its January 2004 30 call. Overall, sentiment toward the shares is relatively mixed. PFE's Schaeffer's put/call open interest ratio sits at 0.68, which is higher than 97 percent of those taken over the past year. However, the number of PFE shares sold short plunged 10 percent in October to 53.3 million. This is less than three times its average daily trading volume, reducing the likelihood of the stock enjoying a covering rally. Wall Street also remains enamored of the company, with 16 of the 24 analysts following PFE rating it a "buy" or better. Any downgrades from this optimistic bunch could spell trouble.

Technically speaking, the equity continues to encounter resistance at its 20-week moving average, a trendline that has capped the shares since the beginning of August. Additional resistance rests at the equity's declining 20-month moving average. The stock has not managed a monthly close above this long-term trendline since November 2001. Potential options-related resistance rests at the 32.50 level, with more than 31,300 calls in residence in the November series. It looks like these shares have a rough road ahead of them.

Click the following link to see the Monthly Chart of PFE since August 2001: http://www.schaeffersresearch.com/wire?ID=8791.