Schaeffer's Midday Options Update Features Google, Boeing, Toll Brothers, H.J. Heinz, and Procter & Gamble.

CINCINNATI -- Today's Schaeffer's Midday Options Update Google (NASDAQ:GOOG), Boeing (NYSE:BA), Toll Brothers (NYSE:TOL), H.J. Heinz (NYSE:HNZ), and Procter & Gamble (NYSE:PG). 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=PRMOU1M&PAGE=1 .

Options Update:

Strong Economic Data Lifts Stocks

The Commerce Department got the day started off on the right foot with the release of the latest version of the first-quarter Gross Domestic Product (GDP). According to the department, the U.S. economy grew at a 3.5-percent annual rate in the quarter, falling just shy of the expected 3.6-percent rise analysts had expected. A large part of the increase was attributed to an unexpected decline in the March trade deficit number. Additionally, the Commerce Department reported that the core personal consumption expenditure price index rose 2.2 percent, unmoved from its initial estimate. Final sales of domestic products rose 2.7 percent in the first quarter, up from the initial estimate of a 1.9-percent rise. Consumer spending was revised slightly higher to a 3.6-percent increase from the initial estimate of a 3.5-percent gain, but this number was down from a 4.2-percent rise in the fourth quarter.

For the previous week, initial jobless claims inched higher by 1,000 to 323,000, compared to the Street expectations for an increase to 326,000. The four-week moving average, which is used to smooth out distortions in the numbers, rose by 500 to 330,500 to hit a new five-week high. Meanwhile, estimate for the week of May 14 were revised higher to 322,000. Continuing claims dropped by 22,000 to 2.574 million and the four-week moving average rose by 6,000 to 2.59 million.

Boeing Soars New Order

Shares of Boeing (NYSE:BA) have added more than two percent today after the firm reported that it had received an order from a Singapore aircraft leasing company for 20 next-generation 737s and the purchase rights for 20 additional planes in a $1.1 billion deal. According to an article in The Wall Street Journal, Indonesian low-cost carrier Lion Mentari Airlines intends to spend $3.9 billion to buy 60 737 aircraft.

The Corporate Shuffle

Procter & Gamble (NYSE:PG) and Gillette (G) announced today that they have moved back the dates on which their respective shareholders will vote on the proposed $57-billion merger of the consumer goods companies from June to July. The votes will now be held on July 12 versus the previously released data of June 13 for PG shareholders and June 14 for G shareholders. At last check, both securities were trading slightly higher in midday action.

Earnings News

Toll Brothers (NYSE:TOL) reported second-quarter earnings of $170.1 million, or $2.01 per share as sales soared 52 percent to $1.25 billion. Analysts had forecast a gain of $1.79 per share. The home builder cited increasing numbers of communities in lot-constrained markets, its growing brand name, and broadening diversity of luxury new home product lines for the strong earnings performance. TOL's backlog at the end of the quarter was up 57 percent to $5.87 billion. What's more, the company lifted its full-year 2005 forecast, now seeing a 70-percent spike rise in profitability.

H.J. Heinz (NYSE:HNZ) also slipped into the earnings confessional, posting a fourth-quarter profit of $206.5 million, or 58 cents per share. Revenue for the quarter rose five percent to $2.45 billion. Earnings from continuing operations rose to 63 cents per share, beating the Street estimate by a penny. For fiscal 2006, HNZ is targeting growth rates of four to six percent for sales and seven to 10 percent for operating income, with earnings expected in a range of $2.35 to $2.45 per share. The consensus forecast currently stands at $2.46 per share.

Most-Active Options Update

At 1:18 p.m. eastern time, the Dow Jones Industrial Average (DJIA - 10,513.7) was up 0.53 percent, while the S&P 500 Index (SPX - 1196.52) added 0.55 percent. The tech-heavy Nasdaq Composite (COMP - 2,067.4) has jumped 0.84 percent. At 1:18 p.m., 1,713,066 calls and 1,023,060 puts had changed hands, for a composite put/call ratio (across all six options exchanges) of 0.59. The CBOE put/call volume ratio for equity options stood at 0.56.

Google

Google (NASDAQ:GOOG) has had a busy week. First, the shares received a nice push higher on rumors that it could soon be added to the S&P 500 Index (SPX). Of course, the question has been asked, with a market cap of more than $72 billion and some impressive clout on the Street, how much longer can the stock be ignored? Then, Goldman Sachs reiterated its "outperform" rating on eBay (EBAY), Yahoo! (YHOO), and GOOG yesterday after its third Internet usage study and ahead of an industry conference it'll hold. The firm stated the three companies have superior growth and profitability vs. the sector average, and have significant share appreciation potential.

Technically speaking, GOOG has rallied along the support of its 10-day moving average since punching through staunch resistance at the 200 level on April 21. Furthermore, the shares had soared well above its ascending 10-week and 20-week moving averages.

Investors are confident that the equity has gone too far and it is due for a pullback. The security's Schaeffer's put/call open interest ratio has risen from its recent low of 0.85 (reached on May 23) to its current reading of 0.92. What's more, options players are focused on the equity's June 250 put in trading today. More than 11,200 contracts have crossed the tape at this out-of-the-money strike. With open interest already numbering more than 15,000 contracts, it will be interesting to see how much of this volume translates into new positions.

Options players aren't the only skeptics. Short sellers increased their bearish bets by 11 percent in May to 9.6 million shares, or more than five percent of the security's total float. However, this accumulation of bearish bets results in a short-interest ratio of only 0.80 days to cover, offering little in the way of potential support for the security.

Wall Street, on the other hand, is quite smitten with the company. According to Zacks, 16 of the 20 analysts following GOOG rate it a "buy" or better, while the remaining four give it a "hold." This configuration leaves far more room for potential upgrades than downgrades, and could spell trouble for the equity.

Click on the following link to see the Daily Chart of GOOG since September 2004 with 10-Day Moving Average: http://www.schaeffersresearch.com/wire?ID=13277 .

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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 .