Schaeffer's Midday Options Update Features Avon Products, Gateway, AtRoad, SBC Communications and PMC-Sierra.

CINCINNATI -- Today's Schaeffer's Midday Options Update Features Avon Products (NYSE:AVP), Gateway (NYSE:GTW), AtRoad (NASDAQ:ARDI), SBC Communications (NYSE:SBC) and PMC-Sierra (NASDAQ:PMCS). The Midday Options Update 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 www.SchaeffersResearch.com - the home of Bernie Schaeffer and Schaeffer's Investment Research. For additional information about this report or to have it delivered to you free via email every day click on the following link: http://www.schaeffersresearch.com/redirect.aspx?CODE=PROB1M&PAGE=1

Options Update: Don't Get Misty on PMC-Sierra

Mixed economic data have had the equivalent effect on the market today. In its quarterly update on U.S. Gross Domestic Product (GDP), the Commerce Department reported a less-than-expected 3.7-percent annual rate in the third quarter following a 3.3-percent growth in the second quarter. Despite the continued rise in GDP, economists were expecting a much more impressive increase of 4.3 percent. Meanwhile, the core inflation rate increased 0.7 percent, its lowest rise in 42 years. To dig deeper into the GDP report, check out: "GDP Misses Estimate."

Balancing out this somewhat dire report, the University of Michigan noted that its Consumer Sentiment Index was revised higher to 91.7 from its early-October reading of 87.5. This time, economists were surprised to the upside, as they were expecting a decrease to 85.0. Elsewhere, the Chicago Purchasing Managers' Index (PMI) rose at its fastest pace in 17 years. The Chicago PMI jumped to its highest reading since January 1988 at 68.5 percent from the 61.3 percent reported last month. Once again economists were bested, as they were anticipating a more modest gain to 61.6 percent.

Overshadowed Earnings

With economic data and a looming presidential election dominating the investor mindset today, several quarterly earnings reports are being passed over for the more sensational data. For the record, Avon Products (NYSE: AVP) slipped into the earnings confessional today for a third-quarter makeover of its earnings report. AVP posted net income of $176.9 million, or 37 cents per share, rising over last year's $133.1 million, or 28 cents, for the same period. Sales for the quarter arrived at $1.78 billion. The figure bested the Street's forecast, with analysts anticipating a bottom-line figure of 34 cents per share on sales of $1.8 billion. Looking forward, the firm boosted its 2004 guidance to $1.75-$1.77 per share from its previous forecast of $1.72. For more on AVP, please read: "Avon and Clear Channel Reveal Earnings."

Desktop PC manufacturer Gateway (NYSE: GTW) also graced the earnings arena today, reporting a loss of $59 million, or 16 cents per share, on revenue of $915 million. Excluding charges, GTW's loss turned into a profit of $4 million, or one cent per share, for the third quarter, soaring past the Street's view for a seven-cent loss. Revenue totaled $915 million for the quarter, falling just short of the consensus estimate for $936 million. Following on the heels of this upside surprise, GTW officials guided fourth-quarter earnings, excluding charges, of one to two cents per share on revenue between $975 million to $1.025 billion.

Upgrade Away!

In other news, AtRoad (NASDAQ: ARDI) has skyrocketed 47 percent so far today after announcing that it was selected by SBC Communications (NYSE: SBC) subsidiary SBC Services to provide mobile resource management services for approximately 35,000 field service technicians. The contract arrived the morning after ARDI posted Street-beating, third-quarter earnings of five cents per share. Analysts were anticipating a profit of two cents per share. On the news, ARDI received a trio of upgrades, two from "hold" to "buy," and one from "underperform" to "outperform."

Most-Active Options Update

At 1:07 p.m. eastern time, the Dow Jones Industrial Average (DJIA - 10,005.2) is up 0.02 percent and the S&P 500 Index (SPX - 1126.41) is lower by 0.09 percent. The Nasdaq Composite (COMP - 1969.6) is down 0.31 percent. At 1:08 p.m. in the options pits, 1,500,506 calls and 924,321 puts traded for a composite put/call ratio across all five exchanges of 0.61. The CBOE put/call ratio for equity options weighed in at 0.64.

PMC-Sierra

Investors continue to profess an optimistic preference for this semiconductor concern. Recent options activity for PMC-Sierra (NASDAQ: PMCS) has calls more than tripling puts in the front three months of options, as the security's Schaeffer's put/call open interest ratio of 0.32 ranks below 92 percent of all those taken in the past year. What's more, speculators have sent more than 5,300 calls across the tape at PMCS's November 10 call on open interest of 11,177 contracts. While we will need to wait until tomorrow to see if this bullish activity will translate into new positions, this peak front-month accumulation could offer a potential layer of options-related resistance for the shares.

Meanwhile, short sellers haven't exactly been jumping at the chance to short PMCS shares lately. While short interest actually increased by three percent over the past month, it would still take approximately two days to cover the 15.2 million PMCS shares sold short, lessening the potential for covering support for the equity. On the contrary, Wall Street remains in a bearish grip, with 12 of the 14 covering analysts rating the shares a "hold" or worse.

Technically speaking, PMCS continues to struggle with overhead resistance at its declining 20-week moving average. The equity has not closed a week above this intermediate-term trendline since February. Furthermore, the stock's 10-month and 20-month moving averages are poised for a bearish cross - a technical formation that often signals continued downside for the security. PMCS even continues to be a relative-strength laggard, having underperformed its peers in the PHLX Semiconductor Index and the COMP since January. With heavy bullish investor sentiment, PMCS could be set for a continuation of its downtrend.

Click the following link to see the Weekly Chart of PMCS since January 2004 with 20-Week Moving Average: http://www.schaeffersresearch.com/wire?ID=11603&obspage=2.

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About Schaeffer's Investment Research (www.SchaeffersResearch.com)

Schaeffer's Investment Research, founded by Bernie Schaeffer in 1981, is a financial information and trading resources company. It publishes Bernie Schaeffer's Option Advisor, the nation's leading options subscription newsletter. The firm's contrarian approach focuses on stocks with technical and fundamental trends that run counter to investor expectations. The firm's website, http://www.SchaeffersResearch.com, is recognized as one of the leading information sources for stock and options traders and was cited as the top options website by both Forbes and Barron's. Click here for more details about Schaeffer's trading methodology: http://www.SchaeffersResearch.com/method.