Daily Commentary from SIR Highlights the Following Stocks: Nike, Morgan Stanley, Goldman Sachs, Xerox, First Data.

Business Editors

CINCINNATI--(BUSINESS WIRE)--Nov. 25, 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: Nike (NYSE:NKE), Morgan Stanley (NYSE:MWD), Goldman Sachs (NYSE:GS), Xerox (NYSE:XRX), First Data (NYSE:FDC).

There has been very little action in the market today, despite a plethora in positive economic data. The Commerce Department reported that the U.S. economy grew at a blistering 8.2 percent during the third quarter compared to preliminary Gross Domestic Product estimates of 7.2 percent. Additionally, consumer confidence bounded to its highest level in a year during November. The Conference Board's consumer confidence index rose to 91.7 from 81.7 for October, topping economists' estimates for a gain of about 85.5. Contrasting with the board's reports, however, October existing home sales fell 4.9 percent to 6.35 million units versus an expected 6.56 million.

On the analyst rankings front, Nike (NYSE:NKE) received an upgrade from "neutral" to "buy" on a major brokerage's belief in the equity's potential for "better-than-expected earnings" in fiscal 2004 and 2005. Additionally, Morgan Stanley (NYSE:MWD) was raised to "neutral" from "underweight" and Goldman Sachs (NYSE:GS) was upgraded to "overweight" from "neutral" as analysts cited improving expectations for the investment banking businesses.

Finally, Xerox (NYSE:XRX) was gifted with two upgrades to "equal-weight" from "underweight" and to "buy" from "neutral" after analysts stated that the company's new financial outlook for 2004 and 2005 were more "realistic" than previous forecasts from the firm. By midday, the shares were up seven percent to $11.36.

At 1:30 p.m. eastern time, the Dow Jones Industrial Average (DJIA - 9742.1) is down 0.06 percent and the S&P 500 Index (SPX - 1052.73) is higher by 0.06 percent. The Nasdaq Composite (COMP - 1947.3) is up 0.01 percent. At 1:30 p.m. in the options pits, 1,376,331 calls and 726,165 puts traded for a composite put/call ratio across all five exchanges of 0.52. The CBOE put/call ratio for equity options weighed in at 0.39

Optimism continues to build for credit-card mogul First Data (NYSE:FDC). The equity saw 5,904 calls cross the tape on open interest of 2,998 at its February 42.50 strike today. This is likely to prove to be the initiation of a sizeable new position. Options players aren't the only ones betting bullishly on FDC, as short interest dropped 27 percent to 28 million shares over the most recent reporting period. What's more, Wall Streets love affair with FDC is blatantly obvious, as not one of the 32 analysts following the stock rates it a "sell."

Switching gears to FDC's technical picture, the stock has recently been underperforming its peers in the SPX. Since June, the security's weekly relative-strength measure versus the broad market has tumbled, unable to find support. FDC succeeded in closing back above its 10-day moving average yesterday. This trendline has troubled the shares since the end of September. However, potential options-related support lies at the 35 strike - the site of peak put open interest in both the December and January series with a total of more than 29,400 contracts. With plenty of room for downgrades from enamored analysts and little in the way of short interest to supply a covering rally, FDC could have a rocky tumble lower should it not live up to expectations.

Click the following link to see the Daily Chart of FDC since October 2003 with 10-Day Moving Average: http://www.schaeffersresearch.com/wire?ID=8953 .