Schaeffer's Midday Options Update Features Morgan Stanley, Coca-Cola, Ford Motor Company, Nokia, and North Fork Bancorporation.

CINCINNATI -- Today's Schaeffer's Midday Options Update features Morgan Stanley (NYSE:MWD), Coca-Cola (NYSE:KO), Ford Motor Company (NYSE:F), Nokia (NYSE:NOK), and North Fork Bancorporation (NYSE:NFB). 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: Which Direction is North Fork Headed?

The much-anticipated crude inventory report from the Energy Department has crossed the wires, and it appears that investors are still digesting the data. According to the Energy Department, crude supplies dropped by 1.6 million barrels last week, narrower than the expected decrease of two million barrels. This drop brings the reserve of black gold to 327.4 million. Not all the news was bad, gasoline inventories saw an increase of 200,000 barrels to 215.9 million, while distillate stocks saw a 1.3-million-barrel increase to 111.5 million barrels. The news hasn't done too much to crude prices yet, as per-barrel prices continue to hover near $59 per barrel.

The dollar decided to continue its march against its European counterparts today, thanks to the Bank of England meeting minutes that revealed two members were against their seven colleagues who favored an interest rate cut. These contrary votes helped speculation concerning lower interest rates and possibly even the European Central Bank. This suspicion continued to cut the appeal of the euro and the pound in the eyes of foreign investors.

Broke Earnings

Brokerage firm, Morgan Stanley (NYSE:MWD), announced today that its second-quarter net income dropped 24 percent from last year. The firm cited legal costs associated with a Parmalat settlement and a tougher trading environment for the decrease. This drop was larger than the 20-percent drop that MWD had previously warned against earlier this month. In the second quarter, MWD earned 86 cents per share, lower than the analysts' estimated 92 cents per share.

That's Settled

The European Commission (EC) ended its six-year probe of Coca-Cola (NYSE:KO) today. The soda seller was able to escape a fine, but has been forced to make an adjustment to its selling practices. The EC stated that KO will not be able to enter into exclusivity arrangements, can't offer target or growth rebates, and won't be able to use its strongest brands to sell less popular products. So, no more forcing retailers to stock Vanilla Coke when all they want to sell is Coke. Additionally, the EC determined that 20 percent of free space provided by KO coolers will be used for competing products. This news has sent the purveyor of carbonated sugary sweetness lower in trading thus far today.

They're Just Pining for the Fords

High costs and slumping sales caused Ford Motor Company (NYSE:F) to slash its fiscal-year profit target and announce that it is going to cut its workforce. After the closing bell sounded yesterday, the second-ranked automaker in the states issued a revised forecast of $1 to $1.25 per share for fiscal 2005. F had previously forecast earnings between $1.25 and $1.50 per share. The cuts didn't stop there, F announced that it will cut roughly 1,750 of its white-collar jobs in North America. This will amount to roughly five percent of its 35,000 salaried workers in North America. The cuts are to take effect by October 1. While F was in the spotlight, it decided to announce that it will eliminate bonuses for management worldwide while suspending its matching payments to salaried workers' 401(k) retirement plans. This will take effect on July 1. Currently, Standard & Poor's tags F with a BB+ rating, the first level of junk status.

NOK, NOK, Who's There?

Finnish mobile-phone manufacturer, Nokia (NYSE:NOK), was the subject of some conflicting brokerage action today. Deutsche Bank and UBS couldn't seem to make up their minds on which direction NOK is headed, so the two issued conflicting news. First, Deutsche Bank; the brokerage cut NOK to "hold" from "buy" on the belief that the positives from a strong second quarter and 2005 are already priced into the shares. Deutsche Bank noted that the emerging market subscriber growth in April and May has been strong and could be a benefit to the company. Then, UBS issued an upgrade to "buy" from "neutral" for NOK, noting that it sees less execution risk now that the company has improved its customer management process and simplified its approaches to market segmentation and product development. UBS also stated that it expects NOK to benefit from consolidation in the mobile-device market. The brokerage did warn that the upgrade is not a call on second-quarter earnings, which it sees falling short of the consensus forecast.

Most-Active Options Update

At 1:24 p.m. eastern time, the Dow Jones Industrial Average (DJIA - 10,614.6) has gained 0.14 percent, matched by the S&P 500 Index (SPX - 1215.27). The Nasdaq Composite (COMP - 2,093.2) has gained 0.10 percent. At 1:24 p.m., 1,459,036 calls have traded hands compared to 1,133,237 puts, for a total put/call single-day volume ratio of 0.77 across all six options exchanges. The CBOE's put/call volume ratio stands at 0.87 today.

North Fork Bancorporation

According to Hoover's, North Fork Bancorporation (NYSE:NFB), is the holding company for North Fork Bank and recently acquired Trust Company of New Jersey and GreenPoint Financial. NFB serves residents and businesses from its roughly 350 offices in and around New York City.

NFB's August 30 call (NFB HF) has seen a heavy amount of activity today after the stock was initiated at "buy" yesterday by Advest. This action could help push NFB's already low Schaeffer's put/call open interest ratio (SOIR) lower, should today's volume translate as new positions. The banking equity's SOIR checks in at 0.17, which is lower than 99 percent of the readings taken over the past 52 weeks. A percentile ranking this low reflects extreme love from the Street. Additional optimism can be seen in the just-released short-interest activity for NFB. According to the Dow Jones Newswire, NFB saw a 6.96-percent decrease in short interest during the past month (May 13 - June 15). This decrease indicates that bears are allowing their pessimistic bets against NFB to unwind, marking a build-up of optimism.

Analysts are also optimistic toward NFB. According to Zacks, the analyst community feels that NFB is worthy of 11 "strong buys," five "buys," five "holds," and one "sell." Should the 16 optimists among the bunch change their opinions of the bank, watch for downside pressure on the stock.

Technically, it appears that it is going to be better to sit on the sidelines and observe what happens with NFB. Looking at the chart below, you will notice that the line that connects the company's lows since mid-2000. Using this line as a trendline, we can see that NFB has slipped below this line and is grasping for any level of support it can find. Looking at the equity's other charts, it appears that it may find some long-term support at the 28 level, where its 20-month trendline currently resides. Further support can be found from NFB's 20-week trendline, which is also near the 28 level. Unfortunately for the firm, this trendline is descending. But NFB can take heart as its 10-week trendline is rapidly approaching and looks like it could be poised to attempt a run at a bullish cross of its 20-week counterpart. With a lack of money on the sidelines to push NFB higher, it may be better just to observe what this stock does in the future.

Click on the following link to a Monthly Chart for NFB: http://www.schaeffersresearch.com/wire?ID=13467 .

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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 .