Schaeffer's Midday Options Update Features Morgan Stanley, McDonald's, Nokia, Comverse Technology, FuelCell Energy.

Business Editors

CINCINNATI--(BUSINESS WIRE)--Sept. 9, 2003

Today's Schaeffer's Midday Options Update features Morgan Stanley (NYSE: MWD), McDonald's (NYSE: MCD), Nokia (NYSE: NOK), Comverse Technology (NASDAQ: CMVT), and FuelCell Energy (NASDAQ: FCEL). 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

The market is backpedaling a bit this afternoon following a series of downgrades from analysts. One brokerage firm cut its rating of most retail sub-sectors from "neutral" to "cautious." However, the news wasn't all bad for the retail group, as McDonald's (NYSE: MCD) saw August same-store sales jump 8.8 percent in the U.S. and 3.8 percent globally. Several analysts responded by raising their earnings expectations for the company. In addition, the bank of Tokyo-Mitsubishi and UBS reported that the weekly U.S. chain stores index rose by 0.5 percent.

In other news, oil service issues have slipped lower following a downgrade of oilfield service stocks from "overweight" to "market weight." Nokia (NYSE: NOK) has tumbled more than five percent despite lifting its third-quarter earnings guidance. The company said it expects flat to slightly lower sales in the quarter due to a weaker U.S. dollar. Comverse Technology (NASDAQ: CMVT) reported a second-quarter loss of three cents per share, squeaking past the Street estimate for a loss of four cents per share. Sales for the quarter rose to $188.5 million. FuelCell Energy (NASDAQ: FCEL) also surpassed the Street outlook of a loss of 46 cents per share, posting a loss of only 38 cents per share.

At 1:17 p.m. eastern time, the Dow Jones Industrial Average (DJIA - 9546.1) is down 0.42 percent and the S&P 500 Index (SPX - 1025.37) is lower by 0.61 percent. The Nasdaq Composite (COMP - 1879.8) is down 0.47 percent. At 1:18 p.m. in the options pits, 1,307,495 calls and 862,061 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 0.57.

Morgan Stanley (NYSE: MWD) is experiencing some heavy call trading this afternoon. Its September 50 strike has seen more than 10,400 contracts cross the tape. We shall have to wait until tomorrow to see if this hefty volume translates into new positions since existing open interest already checks in at 16,021. Overall, sentiment toward the shares remains pessimistic. The Schaeffer's put/call open interest ratio for MWD stands at 0.77, which is higher than 81 percent of those taken over the past year. Furthermore, short interest soared 26 percent higher in August to 13.9 million shares. This is nearly three times its average daily trading volume. Wall Street is even skeptical, as 11 of the 19 analysts following MWD rate it a "hold" and two even rate it a "strong sell." Any upgrades could boost the security higher.

The stock is currently battling resistance at the 50 level. This has proven to be a difficult area for the shares. In fact, MWD has logged only one weekly close above 50 since late April 2002. What's more, the security has underperformed its peers in the AMEX Securities Broker/Dealer Index since July 2000. Investors should closely watch this level. A break above it could result in traders covering their bearish positions, further fueling a rally.

Click the following link to see the Weekly Chart of MWD since December 2001 with 10-Week and 20-Week Moving Averages: http://www.schaeffersresearch.com/wire?ID=8416.

The best way to take advantage of the timely Schaeffer commentaries is to sign up to receive their free e-newsletters -- Opening View, Midday Report, Market Recap and Monday Morning Outlook. Click here to have the Schaeffer's commentaries delivered to you free via email every day. 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.

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.