Schaeffer's Midday Options Update Features Transocean, Jabil Circuit, Accenture, Winnebago Industries, Atmos Energy.

CINCINNATI -- Today's Schaeffer's Midday Options Update Features Transocean (NYSE:RIG), Jabil Circuit (NYSE:JBL), Accenture (NYSE:ACN), Winnebago Industries (NYSE:WGO), Atmos Energy (NYSE:ATO). 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/addinfo.

Schaeffer's Midday Options Update: Drilling Down on Transocean

It is proving to be yet another sluggish day on the market, as an earnings warning from Jabil Circuit is weighing on the tech sector, while investors have been left to dig through a second economic-data-laden day. Below is a quick recap of this morning's festivities:

-- The Labor Department reported that the Producer Price Index (PPI) rose 0.8 percent in the past month, marking the largest increase since March 2003. The Core Index (which excludes the volatile food and energy goods) rose 0.3 percent. Both increases came in higher than expectations, as economists had forecast a 0.6-percent rise in the PPI and a 0.2-percent increase in the core index.

-- Additional data from the Labor Department showed initial weekly jobless claims falling 15,000 to 336,000 in the latest week. The more reliable four-week average fell 2,750 to 343,250. Both figures were largely in line with expectations.

-- Finally, the Conference board reported that leading economic indicators rose 0.5 percent in May, arriving higher than the anticipated 0.3-percent rise.

Within the tech sector, Jabil Circuit (NYSE:JBL) plunged more than 16 percent after guiding fourth-quarter earnings to 25-27 cents per share, slipping beneath the Street's view for a profit of 28 cents per share. Meanwhile, the firm guided 2004 earnings lower to $1-$1.02, also beneath the consensus estimate. The company reported earnings for the third quarter at 19 cents per share, trouncing last year's two-cent-per-share profit, but falling in line with expectations.

In continuing earnings coverage, Accenture (NYSE:ACN) projected higher earnings for both the current third quarter and the upcoming fourth quarter. The company guided higher for the current period, placing earnings six cents above the current consensus forecast at 37 cents per share. ACN also projected fourth-quarter earnings of 25-29 cents per share on revenue of $3.4-$3.5 billion, compared to Wall Street's expectations for a profit of 29 cents and revenue of $3.37 billion.

Winnebago Industries (NYSE:WGO) is having a road trip of a day after posting third-quarter income of $17.7 million, or 51 cents per share. The number more than doubled last year's profit of 24 cents per share, and topped the consensus estimate of 46 cents per share. Revenue for the quarter rose to $310.2 million from the $200.2 million reported last year.

In other corporate news, it was let's-make-a-deal Thursday, as Atmos Energy (NYSE:ATO) stated that it will acquire all of TXU Corp.'s TXU Gas Co. operations for $1.925 billion in cash. Elsewhere, Imco Recycling agreed to merge with Commonwealth Industries in an all-stock deal. IMR stockholders will receive approximately 54 percent of the new company, while CMIN stockholders will garner approximately 46 percent. Lastly, JDA Software has agreed to buy QRS Corp. for in an all-stock deal valued near $100 million.

At 1:15 p.m. eastern time, the Dow Jones Industrial Average (DJIA - 10368.1) is down 0.10 percent and the S&P 500 Index (SPX - 1131.11) is down by 0.22 percent. The Nasdaq Composite (COMP - 1984.9) is down 0.67 percent. At 1:16 p.m. in the options pits, 1,352,434 calls and 898,404 puts traded for a composite put/call ratio across all five exchanges of 0.66. The CBOE put/call ratio for equity options weighed in at 0.58.

Oil services company Transocean (NYSE:RIG) has been the recipient of a steady influx of pessimistic sentiment lately. Today's heavy call volume of more than 6,000 contracts at the security's July 30 strike notwithstanding (as we will have to wait until tomorrow to see if this activity translates into new positions), RIG's Schaeffer's put/call open interest ratio of 0.75 ranks above all other readings taken in the past year. What's more, short interest increased by four percent over the past month, resulting in a short-interest ratio of nearly five days to cover. This build-up of bearish bets could provide support to the stock in the form of a covering rally. Even Wall Street is ganging up on RIG. According to Zacks, 14 (or 63 percent) of the 22 analysts covering the security rate it a "hold" or worse.

The contrarian read for RIG is somewhat muted given the fact that the stock has been in a steady downtrend since peaking at a new annual high in March. The security has been plagued by resistance at its declining 10-day and 20-day moving averages, and has recently rallied into resistance at its 20-week trendline. Just above this trendline lies another technical sticking point for the shares in the form of intermediate-term resistance at the 28 level. Investors would be wise to turn a cautious eye toward RIG at the present time. While a rejection at either the 28 level or the 20-week would be expected at this juncture given RIG's past technical performance, a solid breach of these resistance levels could spark unraveling of bearish sentiment and provide a sharp pop for the shares.

Click the following link to see the Weekly Chart of RIG since November 2003 with 20-Week Moving Average:

http://www.schaeffersresearch.com/wire?ID=10406 .

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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 .