Schaeffer's Street Chatter Highlights the Following Stocks: AMR Corp., Boeing, SBC Communications, and Sprint.

CINCINNATI -- Today's "Street Chatter" from Schaeffer's Investment Research focuses on: AMR Corp. (NYSE:AMR), Boeing (NYSE:BA), SBC Communications (NYSE:SBC), and Sprint (NYSE:FON). "Street Chatter" is a report that analyzes three newsworthy stocks that are generating a lot of attention on Internet message boards. "Street Chatter" is published on www.SchaeffersResearch.com - the home of Bernie Schaeffer and Schaeffer's Investment Research.

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Street Chatter:

1. AMR Corp. (NYSE:AMR) said today that its costs are rising while its unit revenue is declining. This unfavorable combination is worsened by the fact that the airline plans to spend more than $1 billion more on fuel this year than it had originally forecast.

The stock has dropped about four percent lower today and is beneath double-tiered technical resistance. First are the equity's 10-week and 20-week moving averages, which are perched overhead and which have been pressing the stock lower since mid-February. Next is the 9.45 mark, which is the 50-percent retracement point between AMR's April 2003 low and its January 2004 peak.

Sentiment on AMR is notably mixed. The bulls are well-represented by the options crowd, as AMR's Schaeffer's put/call open interest ratio (SOIR) of 0.58 is just five percent from an annual low. A historically low SOIR reading implies favoritism toward call positions, which are usually utilized to place bullish bets. Bears have hedged their bets against AMR with over 50 million shorted AMR positions, accounting for more than 30 percent of the equity's float and representing a short-interest ratio of 8.5 days to cover. Wall Street is leaning toward the bullish camp. According to Zacks (www.Zacks.com), there are currently six "strong buy" ratings on AMR, three "holds," and not one outright "sell."

Today's news has spurred some activity in AMR options pits. The October 10 call has seen more than 10,600 contracts cross the tape today. With only 928 open contracts at this back-month strike heading into today's action, the bulk of this volume is likely to translate as new open interest.

Click the following link to see the Weekly Chart of AMR Since March 2003 With 10-Week and 20-Week Moving Averages: http://www.schaeffersresearch.com/wire?ID=10960 .

2. Late Thursday evening, the U.S. Air Force awarded Boeing (NYSE:BA) with a $54 million rocket-launch contract in spite of the fact that BA's rocket unit has been temporarily suspended from receiving Fed contracts. Air Force officials said that while this new contract does not lift the suspension, it is considered an exception due to reasons of "compelling national interest."

BA has failed to surge up into the wild blue yonder today despite this good news. The stock began the day in positive territory but has subsequently settled down near the breakeven mark. BA shares have enjoyed a solid uptrend since early 2003, however, appreciating 112 percent in less than 18 months. This week, the stock has taken out short-term resistance at the 51 mark and has notched a new annual-high reading.

Some skepticism lingers on the equity, which is encouraging from our contrarian perspective. Wall Street is the most cynical bunch. With the stock at new annual highs, there are just five "buy" ratings on BA compared to 10 "holds" and three "sells." Any change of heart from this wary bunch could result in upgrades, which could give the shares a short-term boost. The equity's SOIR stands at 0.89, which is in the 38th annual percentile and could have more downside potential.

Click the following link to see the Weekly Chart of BA Since March 2003 With 10-Week and 20-Week Moving Averages: http://www.schaeffersresearch.com/wire?ID=10960 .

3. In one of the largest agreements between rival telecom providers to date, Sprint (NYSE:FON) and SBC Communications (NYSE:SBC) announced plans to provide combined wireless Internet services (Wireless-Fidelity, or Wi-Fi) in hotels, airports, and other locations. FON gains access to 2,300 locations through the deal, while SBC can move into FON-heavy zones such as Salt Lake City and Kansas City.

In late-afternoon trading, FON shares are unchanged on the day. From a technical perspective, FON is currently struggling with the 19 region, which has thwarted advance attempts from the shares since the beginning of 2004.

The SOIR for FON spiked higher after August options expiration and now weighs in at 1.35, with open puts topping open calls by a fairly significant margin. The reading is relatively average for FON, however, standing in the 63rd annual percentile. On the short-interest front, the number of shorted FON shares increased by nine percent during the most recent reporting period to 59.8 million, for a short-interest ratio of 10.6. If the stock is ever able to surmount the 19 mark, short sellers may rush to cover some of their bearish positions, resulting in a short-covering rally.

Click the following link to see the Weekly Chart of FON Since April 2003: http://www.schaeffersresearch.com/wire?ID=10960 .

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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 .