Schaeffer's Midday Options Update Features Intel, PeopleSoft, Eli Lilly, and Motorola.

Business Editors

CINCINNATI--(BUSINESS WIRE)--Sept. 5, 2003

Today's Schaeffer's Midday Options Update features Intel (NASDAQ:INTC), PeopleSoft (NASDAQ:PSFT), Eli Lilly (NYSE:LLY), and Motorola (NYSE:MOT). 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. Each new subscriber will receive a FREE copy of Bernie Schaeffer's Options 101 CD-ROM (a $49.95 value). http://www.schaeffersresearch.com/addinfo.

Schaeffer's Midday Options Update

Trading is mixed this afternoon as investors are struggling with the latest round of unemployment news. The Labor Department reported this morning that August nonfarm payrolls dropped by 93,000 compared to the Street estimate of a gain of 19,000 and July's revised loss of 49,000. Not only was this the largest slide since March, but it also marked the seventh consecutive month of job losses. Surprisingly, the unemployment rate inched to 6.1 percent from July's 6.2 percent.

Tech stocks appears the one strong group today, following Intel's (NASDAQ:INTC) mid-quarter update last night. The chip firm raised the lower end of its third-quarter revenue range to $7.3-7.6 billion. PeopleSoft (NASDAQ:PSFT) also greet investors with some positive news this morning. The company lifted its revenue and earnings forecast for the remainder of 2003 and all of 2004. PSFT cited potential for additional sales and cost savings from the completion of its acquisition of J.D. Edwards.

Eli Lilly (NYSE:LLY) is dashing ahead after reporting that it expects 2003 earnings to come in at the high end of its previous guidance and it reaffirmed its third-quarter outlook. The company has recently been troubled by concerns that one of its new drugs may be delayed.

At 1:00 p.m. eastern time, the Dow Jones Industrial Average (DJIA - 9525.1) is down 0.65 percent and the S&P 500 Index (SPX - 1025.14) is down 0.28 percent. The Nasdaq Composite (COMP - 1869.9) is higher by 0.05 percent. At 1:01 p.m. in the options pits, 1,377,736 calls and 733,457 puts traded for a composite put/call ratio across all five exchanges of 0.53. The CBOE put/call ratio for equity options weighed in at 0.58.

Motorola (NYSE:MOT) is the site of some heavy call trading this afternoon. The equity's January 2004 12.50 call has seen more than 11,500 contracts change hands. We shall have to wait until tomorrow to see if this substantial volume translates into new positions since open interest is already more than 40,600 contracts. What's more, calls are nearly triple puts in the front three months of options, with MOT's Schaeffer's put/call open interest ratio checking in at 0.36. This reading is lower than 94 percent of those taken over the past 52 weeks.

In addition, short interest plunged by 10 percent over the most recent reporting period to 79.2 million shares. However, traders should approach with caution. This accumulation of short interest is still more than seven times its average daily trading volume and could easily fuel a covering rally should the shares successfully break through overhead resistance.

Technically speaking, the security has consolidated along support at the 10.50 level and its 10-day moving average. MOT attempted to stage a rally this morning following one brokerage firm reiterating its "strong buy" rating. The stock has since pulled back with the rest of the market. This 10-11 area may prove troublesome, as it is the site of nearly 25,000 calls in the September series. Another layer of resistance resides overhead in the form of its 20-month moving average. MOT has not enjoyed a monthly close above this trendline since August 2000. With sentiment nearing an optimistic extreme, the stock may soon find itself short of sideline money to help it continue on its rally higher. A slide below support at the support at the 10.50 level may cause investors to unravel their bullish positions.

Click the following link to see the Daily Chart of MOT since May 2003 with 10-Day Moving Average:

http://www.schaeffersresearch.com/wire?ID=8396 .

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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 .