Schaeffer's Midday Options Update Features Pfizer, Guidant, Wal-Mart Stores, Target, and Halliburton.

CINCINNATI -- Today's Schaeffer's Midday Options Update features Pfizer (NYSE:PFE), Guidant (NYSE:GDT), Wal-Mart Stores (NYSE:WMT), Target (NYSE:TGT), and Halliburton (NYSE:HAL). 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. http://www.schaeffersresearch.com/redirect.aspx?CODE=PRMOU12M&PAGE=1 .

Options Update: Heavy Call Activity on Halliburton

The morning began with news that the U.S. economy experienced a dramatic slow-down in the fourth quarter, as the Gross Domestic Product dropped to 1.1 percent. The result of this drop is that fourth-quarter growth was the weakest in three years, according to an estimation from the Commerce Department. Weak auto sales, slower business investment, a rise in imports, and a large drop in federal spending were to blame for the large drop in federal spending. Economists were expecting growth to slow to 2.7 percent in the quarter.

In other news, sales of new homes in the United States posted a surprise increase of 2.9 percent in December. The Commerce Department reported that the adjusted annual rate came in at 1.269 million. Today's news has helped temper the disappointment of poor existing-home sales data earlier this week. What's more, a slow housing market can be a source of concern for investors as real estate has been one of the main drivers of the U.S. economy.

Oopfs!?

This morning, pharmaceutical company Pfizer (NYSE:PFE) retracted a statement that its chief exec made earlier. The statement came from PFE's Chief Executive Hank McKinnel, who was appearing on CNBC with a reporter from the World Economic Forum in Switzerland. McKinnel told the reporter that the company received Food and Drug Administration (FDA) clearance for an inhalable drug to treat diabetes, named Exubera. In a statement, PFE announced that it regretted the statement and expects a decision from the FDA shortly, as the deadline on whether or not to approve the drug is Saturday. Most people following the situation believe that the FDA will either approve Exubera outright, or issue an "approvable" letter.

Guidant Lower

Guidant (NYSE:GDT) posted fourth-quarter income of 23 cents per share earlier this morning. Sales for the three-month period came in at $828 million, which is 14-percent lower than the previous year's same-quarter sales. On average, analysts expected GDT to post earnings of 35 cents per share. Part of the reason for the disappointing earnings is recalls of products and field actions in 2005. The medical-device maker also took a hit of $27 million in foreign currency translations. Earlier this week, GDT agreed to be acquired by Boston Scientific (BSX) for $27 billion.

Wal of Worry

Wal-Mart Stores (NYSE:WMT) was downgraded to "neutral" from "overweight" this morning by J.P. Morgan. The broker made the cut over concerns surrounding turbulence over the next 12 to 24 months with a new field organizational structure and upscale merchandise and marketing initiatives. This news sent the shares tumbling more than 0.50 percent in trading. For a technical analysis of WMT, check out Tuesday's Options Update: Heavy Call Option Activity on Wal-Mart Stores.

Upping the Target

J.P. Morgan didn't stop its run through the retail sector with WMT, the brokerage upgraded WMT's rival, Target (NYSE:TGT), to "overweight" from "neutral." Possibly the most significant result of this upgrade was the language that the brokerage used, calling TGT "arguably the best name in retail" with "innovative merchandise" and a marketing team that has "sustainable, high teens earnings per share growth." TGT has increase more than 0.50 percent thus far today.

Most-Active Options Update

At 1:45 p.m. eastern time, the Dow Jones Industrial Average (DJIA - 10,878.9) has tacked on 0.64 percent. The S&P 500 Index (SPX - 1,280.26) has added 0.50 percent, and the Nasdaq Composite (COMP - 2,296.7) has added 0.60 percent. At 1:45 p.m. Eastern time, 3,411,835 calls have changed hands compared to 2,223,252 puts, equaling a single-day put/call volume ratio of 0.65. The CBOE's equity put/call volume ratio weighed in at 0.71.

Halliburton

Halliburton (NYSE:HAL) found its way onto our midday most-active options list this afternoon, thanks to a strong earnings report. Yesterday, the oil company reported more than $1 billion in fourth-quarter income, thanks to a bit of help from a $540 million tax gain and strong sales. The Texas-based company proved that everything is bigger in Texas, including earnings, which came in at $2.08 per share. Analysts forecast earnings of 89 cents per share in the quarter, according to a survey by Thomson First Call. The company also announced plans to file for a 20-percent initial public offering for its KBR subsidiary.

This news sent options players piling into the company's February 80 call (HAL BP), which is currently firmly entrenched as peak call open interest for February. We could see this level act as options-related resistance as the stock continues to increase. While this level is holding fast, we could be at the foot of a short-covering rally for HAL. At its average daily trading volume, it would take more than four days to cover the company's shorted shares.

Just because there is overhead resistance doesn't mean that we should sound the death march when it comes to any advance for HAL. In fact, its 10-month and 10-week moving averages are both poised to help the shares fight through this resistance. Since September 2002, the shares have finished below the support of their 10-month trendline once. The one time that this support failed, the stock relied on the support of its 20-month trendline.

The guru of gushers hasn't found as solid of support from its 10-week moving average, but it has been guided higher by the trendline's support. What's more, this trendline is working its way into the 70 region, which is the site of peak put open interest in February. This combination could provide a springboard for the shares as the enthusiasm from the earnings report wears off. Although oil is one hot commodity, gaining more than one dollar per barrel today alone, the speculative options crowd isn't mad about HAL. The fuel firm's Schaeffer's put/call open interest ratio of 0.73 is higher than 62 percent of those taken in the past year. I would think such a strong performer would receive a tad more optimism from this crowd.

Did I say optimism? Let me introduce you to one heckuvan optimistic bunch, the analysts. According to Zacks, 13 of the 17 analysts covering HAL rate it a "buy" or better. This optimistic configuration leaves little room for error, as any bad news may send this group scrambling for bearish ground. If this situation takes place, the equity may test the support of its 10-week and 10-month moving averages.

Click the following link to see a Monthly Chart of HAL Since July 2002 With 10-Month Moving Average: http://www.schaeffersresearch.com/wire?ID=15103 .

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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 .