Schaeffer's Midday Options Update Features FedEx, Toys R Us, Goldman Sachs, Qwest Communications and Citigroup.CINCINNATI -- Today's Schaeffer's Midday Options Update Features FedEx (NYSE NYSE See: New York Stock Exchange :FDX See full-duplex. fdx - full-duplex ), Toys R Us (NYSE:TOY), Goldman Sachs The Goldman Sachs Group, Inc., or simply Goldman Sachs (NYSE: GS) is one of the world's largest global investment banks. Goldman Sachs was founded in 1869, and is headquartered in the Lower Manhattan area of New York City at 85 Broad Street. (NYSE:GS), Qwest Communications
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=PROB PROB Probable/Probably PROB Problem PROB People's Republic of Bangladesh 1M&PAGE=1 Hot Times, Trouble in the Citi Stocks are trading modestly higher this afternoon, trying to shake off yesterday's oil-induced drubbing. Of course, the viscous fluid isn't helping matter much today. April futures for crude tagged a new all-time high of $57.50 per barrel, but has since moderated to a gain of 34 cents at $56.80. Furthermore, OPEC OPEC: see Organization of Petroleum Exporting Countries. OPEC in full Organization of the Petroleum Exporting Countries Multinational organization established in 1960 to coordinate the petroleum production and export policies of its kicked things off this morning by lifting its 2005 world oil demand forecast to 83.98 million barrels of oil equivalent per day. This estimate is a 2.2-percent increase over 2004. Economic Pot Luck pot luck Noun take pot luck Informal to accept whatever happens to be available: we'll take pot luck at whatever restaurant might still be open The Philadelphia Federal Reserve Bank reported that expansion in the Philadelphia region came in at the slowest pace in the past 20 months. The Philly Fed's index saw a sizeable drop from 23.9 in February to 11.4 in March compared to the Street forecast for a dip to 19.9. For the month, the new orders index rose to 13.2 from 11.7 in February, while the employment index dropped from 12.3 in February to 10.1. Meanwhile, the index of leading U.S. economic indicators Economic indicators The key statistics of the economy that reveal the direction the economy is heading in; for example, the unemployment rate and the inflation rate. increased 0.1 percent, matching the Street forecast. The index is designed to forecast economic trends six to nine months ahead. Initial jobless claims fell by 10,000 last week to land at 318,000. On the other hand, the four-week average of new claims rose by 3,750 to tag 316,500 for the week ended March 12. This is the highest reading for the four-week average since January 25. Continuing claims dropped by 48,000 to hit 2.65 million for the week ended March 5. FedEx Delivers FedEx (NYSE: FDX) reported third-quarter earnings of $317 million, or $1.03 per share, compared to its year-ago gain of 68 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. . Revenue soared 21 percent higher to $7.34 billion. Analysts had forecast gains of 98 cents per share on sales of $7.19 billion. Far From Broke Goldman Sachs (NYSE: GS) finally entered the earnings confessional this morning, posting a first-quarter profit of $1.5 billion, or $2.94 per share. The company easily bested its profit of $2.50 per share for the same period a year ago and the consensus estimate of $2.24 per share. Revenue for the three-month period rose 26 percent to $9.9 billion. Morgan Stanley (MWD MWD Metropolitan Water District of Southern California MWD Measurement While Drilling (oil drilling) MWD Morgan Stanley Dean Witter (stock symbol) MWD Molecular Weight Distribution MWD Military Working Dog ) sidled up to its brokerage house brethren to release its earnings report as well. The firm raked in $1.47 billion, or $1.35 per share, for the first quarter, ramping past its year-ago gain of $1.11 per share. Analysts had predicted earnings for the quarter of $1.16 per share. Sales for the previous quarter rose 10 percent to $6.8 billion. On a Qwest Qwest Communications (NYSE: Q) remains determined to get it hands on MCI (1) (Media Control Interface) A high-level programming interface from Microsoft and IBM for controlling multimedia devices. It provides commands and functions to open, play and close the device. (2) (Microwave Communications Inc. Corp. (MCIP MCIP Meteorology-Chemistry Interface Processor MCIP Member, Canadian Institute of Planners MCIP Maryland College Investment Plan MCIP Mentoring Children of Incarcerated Parents MCIP military command inspection program (US DoD) ). The firm revised its offer so that it is now more than 25 percent higher than the offer MCIP agreed to with Verizon Communications (VZ). Toys R Us (NYSE: TOY) confirmed earlier today that it has agreed to sell its entire company to an investment group including Kohlberg Kravis Roberts Kohlberg Kravis Roberts & Co (commonly referred to as KKR) is a New York City-based private equity firm that focuses primarily on late-stage leveraged buyouts. It was founded in 1976 by Jerome Kohlberg, Jr., and cousins Henry Kravis and George R. , Bain Capital Partners, and Vornado Reality Trust . The group beat out a consortium lead by Cerberus Capital Management, with the deal valuing TOY shares at roughly $26.76 per share. Each partner is to have an equal stake in the company. The deal is expected to close by July, pending regulatory and shareholder approval. For a closer look at TOY, check out A Toy Box Consortium Most-Active Options Update At 1:20 p.m. eastern time, the Dow Jones Industrial Average Dow Jones Industrial Average The best known U.S. index of stocks. A price-weighted average of 30 actively traded blue-chip stocks, primarily industrials including stocks that trade on the New York Stock Exchange. (DJIA DJIA See Dow Jones Industrial Averager (DJIA). - 10,631.1) was down 0.02 percent while the S&P 500 Index (SPX (Sequenced Packet EXchange) The transport layer protocol in the NetWare operating system. Similar to the TCP layer in TCP/IP, it ensures that the entire message arrives intact. SPX uses NetWare's IPX as its delivery mechanism. - 1,190.66) has added 0.22 percent higher. The Nasdaq Composite (COMP - 2,018.8) is higher by 0.15 percent. At 1:35 p.m. in the options pits, 1,8749,313 calls and 1,551,448 puts traded for a composite put/call ratio across all six exchanges of 0.83. The CBOE CBOE See: Chicago Board Options Exchange CBOE See Chicago Board Options Exchange (CBOE). put/call volume ratio for equity options weighed in at 0.96. Citigroup Financial giant Citigroup (NYSE: C) is the focus of some heavy call trading this afternoon. With March option expiration looming tomorrow, it appears that traders may be rolling out a position in the front-month series to the April series. The March 47.50 strike has had almost 7,500 contracts cross the tape on open interest of 48,800 contracts. Meanwhile, the April 47.50 strike has seen more than 8,100 contracts change hands on open interest of 26,800 contracts. We'll have to wait until tomorrow to see where the new positions settle out. Overall, optimism blankets C. The security's Schaeffer's put/call open interest ratio of 0.72 is lower than 85 percent of all those taken over the past 52 weeks. And while short interest skyrocketed an astounding a·stound tr.v. a·stound·ed, a·stound·ing, a·stounds To astonish and bewilder. See Synonyms at surprise. [From Middle English astoned, past participle of astonen, 71 percent in February, the buildup of bearish bets is still far from an extreme. The 38.7 million shorted shares can be covered in less than three days to trading and account for only 0.75 percent of the equity's total float. Wall Street is quite taken with C as well. Zacks reports that 13 of the 17 analysts following the firm rate it a "buy" or better, while only one rate it a "sell." This swell of optimism is rather surprising C lackluster technical performance. Since hitting a peak on February 7 of 49.99, the shares have tumbled more than five percent under resistance at their 10-day and 20-day moving averages. What's more, C is poised to close the week below its 10-week and 20-week trendlines for the first time since the end of October. From a long-term perspective, the shares are perched precariously on support at their 20-month moving average. However, a failure to hold this support level could result in a sharp unwinding of the existing bullish bets. Click on the following link to see the Daily Chart of C since October 2004 with 10-Day and 20-Day Moving Averages: http://www.schaeffersresearch.com/wire?ID=12756 The best way to take advantage of the timely Schaeffer commentaries is to sign up to receive their free e-newsletters -- Opening View, Market Recap and Monday Morning Outlook. Click here to have the Schaeffer's commentaries delivered to you free via email every day: http://www.schaeffersresearch.com/redirect.aspx?CODE=PROB1M&PAGE=1 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 |
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