Schaeffer's S&P 500 Index Hot Stocks Features Phelps Dodge, First Data, L-3 Communications, Mercury Interactive, and Biogen Idec.

CINCINNATI -- Among the stocks featured in the June 3 edition of Schaeffer's S&P 500 Index Hot Stocks are Phelps Dodge (NYSE:PD), First Data (NYSE:FDC), L-3 Communications (NYSE:LLL), Mercury Interactive (NASDAQ:MERQ), and Biogen Idec (NASDAQ:BIIB). Schaeffer's S&P 500 Index Hot Stocks is just one of the many free market commentaries written everyday 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=PRSHS1M&PAGE=1.

Schaeffer's S&P 500 Index Hot Stocks for Friday, June 3, 2005:

A daily feature available on SchaeffersResearch.com is the "SPX Hot Stocks" column. Each afternoon, we will provide a list of the day's top-20 performing stocks in the S&P 500 Index (SPX - 1,196.00) as well as the bottom-20 names. Featured along with this table will be news that is moving some of the securities.

NOTE: Stocks trading under $5 per share have been eliminated from this listing of the top-20 and bottom-20 performing stocks.

The SPX tested resistance at the 1,200 level today, after a close at 1198.85 yesterday. Stocks are generally down in the final day of this short week, with only 23.6 percent of the stocks in the index showing gains.

Phelps Dodge (NYSE:PD) is a firm you might not have heard of, but chances are you're carrying one of PD's products right now, because Hoover's tells me the firm produces the copper used in pennies. Since the middle of May, futures in copper, which are traded on the New York Mercantile Exchange, have been doing very nicely, and PD has followed that trend. Yesterday the PD board revealed a 50-percent increase in the quarterly common stock dividend, from 25 cents per share to 37.5 cents per share, or $1.50 per share for the full year. In a chilly response, Prudential Financial (PRU) called the increase "disappointing" and reduced its second-quarter target for the equity to $5.60 from $8.81. Poor PD should have produced more pennies.

First Data (NYSE:FDC) is parent of money mover Western Union, and the stock has spent the day close to the top of the S&P 500 winners list, rising sharply this morning until checked by resistance at the 40 level. The reason for the price leap? I'll have to get back to you, because right now there is no news. This one is evidently still a Street secret, but money is definitely moving into FDC.

L-3 Communications Holdings (NYSE:LLL) makes satellite and avionics equipment, including those cunningly indestructible black box flight recorders. The stock gapped up this morning on news that LLL has agreed to buy Titan (TTN) in a deal worth about $2.65 billion. TTN is a San Diego IT powerhouse, and the synergy of the deal is not hard to see. LLL will pay $23.10 per TTN share, and says it expects the deal to add earnings of 25 cents per share and sales of $2.7 billion to its 2006 results.

From Mountain View in the heart of Silicon Valley, Mercury Interactive (NASDAQ:MERQ) produces systems that test and analyze enterprise and internet software applications, identifying bottlenecks, for example, and generally making everything run smoothly. The stock is much loved on Wall Street, with eight "hold" ratings, five "buy" recommendations and nine "strong buy" ratings according to Zacks. This morning a new rating came in, with W.R. Hambrecht initiating MERQ at "buy," adding further to the optimism. In the options pits there is just as much love for MERQ, with the Schaeffer's put/call open interest ratio (SOIR) for the stock coming in at 0.69 in the zeroth percentile, the most optimistic end of the spectrum. Yet the stock price fell sharply this morning, turning the 20-day moving average into a resistance level in the process. Why did this happen? There is little news to go on, save for a rather complimentary report on MERQ in BusinessWeek online last week. If the stock continues to decline, all that optimistic sentiment could be cause for concern. If it unwinds, the sellers could find a bottleneck of their own as they all scramble to find buyers. On the Schaeffer's Equity Scorecard MERQ is currently at 2.5 out of 10.0, indicating that the path of least resistance is to the downside.

Biogen Idec (NASDAQ:BIIB) is down again today, after Morgan Stanley cut its rating to "equal weight" from "overweight" due to concerns over competition from rival Novartis AG's (NVS) multiple-sclerosis drug Avonex. BIIB stock fell sharply on February 28, from the 67 level to close below 40 after news emerged of safety concerns relating to drug Tysabri. Just lately the price has recovered, though not enough to risk an attack on resistance at 40. At last check it had retreated to 36.40.

And finally... Oracle (ORCL) stock has been going slowly nowhere for three years, the price wafting gently up and down, with the 15 level as its ceiling and the 10 level its floor. The company acquired Peoplesoft not long ago, and two days ago it announced it has paid off the final balance of the $9.5 billion bridging loan. Safra Catz, Oracle's President and interim-Chief Financial Officer said: "We were able to reduce substantially our acquisition-related debt well ahead of plan." It sounds like good news, but the stock fell this morning, saved only by support from the 80-day moving average which is currently close to 12.5. Despite this staggeringly dull price performance, ORCL is still a Wall Street darling. Zacks shows 12 "strong sell" ratings and six "sells" out of 28 analysts that rate the stock. No one is shouting "sell," and just one voice says ORCL is a "strong sell." Short interest is miniscule, at just 0.94 days to cover, which represents a mere 1.01 percent of the float. I find the whole picture troubling. This level of extreme optimism does not seem to line up with ORCL's week technicals. Just imagine what would happen if the optimists started to move their money elsewhere.

Click the following link to see a Chart of the SPX 500 Index's Top-20 Percentage Gainers: http://www.schaeffersresearch.com/wire?ID=13326 .

Click the following link to see a Chart of the SPX 500 Index's Top-20 Percentage Losers: http://www.schaeffersresearch.com/wire?ID=13326 .

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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 .