Schaeffer's Midday Options Update Highlights the Following Stocks: Baxter International, Goldman Sachs, Lehman Brothers Holdings, Morgan Stanley, Tyson.

Business Editors

CINCINNATI--(BUSINESS WIRE)--Sept. 23, 2003

Today's Schaeffer's Midday Options Update features Baxter International (NYSE:BAX), Goldman Sachs (NYSE:GS), Lehman Brothers Holdings (NYSE:LEH), Morgan Stanley (NYSE:MWD), and Tyson (NYSE:TSN).

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. Click here for the full story exclusively on SchaeffersResearch.com : http://www.schaeffersresearch.com/addinfo .

Schaeffer's Midday Options Update

The market is beginning to rebound this afternoon following a brief dip into negative territory. The only bit of economic news released was the weekly retail chain index, which dropped 1.8 percent last week. The dollar also continues to be weak, with it hitting a fresh three-year low versus the Japanese yen.

In sector action, brokers are having trouble gaining traction despite some stellar earnings reports. Goldman Sachs (NYSE:GS) posted a profit of $1.32 per share compared to earnings of $1.00 per share for the same period a year ago and the Street estimate of $1.22 per share. However, its fixed-income, currency, and commodities businesses dropped 37 percent from last year. Lehman Brothers Holdings (NYSE:LEH) also earned $1.81 per share, soaring past the consensus estimate of $1.35 per share, due to strength in its investment-banking and capital-markets branches. Morgan Stanley (NYSE:MWD) also reported a profit of $1.15 per share, besting analysts' expectations by 46 cents per share.

Elsewhere, Tyson (NYSE:TSN) has added more than seven percent following its announcement that it expects to exceed the Street estimate for the fourth quarter due to strong beef sales. Lowe's is slightly lower despite news that it raised its third-quarter and full-year earnings guidance. Defense sector stocks are also lower on a downgrade due to the results of a poll showing that support for defense spending has begun to falter. In addition, Yahoo! announced plans to restructure its online shopping service to make navigation easier for customers.

At 1:05 p.m. eastern time, the Dow Jones Industrial Average (DJIA - 9530.6) is down 0.05 percent and the S&P 500 Index (SPX - 1023.84) is higher by 0.10 percent. The Nasdaq Composite (COMP - 1884.9) is up 0.55 percent. At 1:06 p.m. in the options pits, 1,220,714 calls and 762,643 puts traded for a composite put/call ratio across all five exchanges of 0.79. The CBOE put/call ratio for equity options weighed in at 0.62.

Baxter International (NYSE:BAX) develops, manufactures, and distributes a wide array of products, systems, and services used by the healthcare industry. The stock is the focus of some heavy option activity this afternoon. Its October 30 put has seen more than 3,200 contracts change hands on open interest of 3,345 contracts. In addition, its October 30 call has had more than 800 cross the tape on open interest of 5,148 contracts. Sentiment toward the equity remains relatively optimistic. Its Schaeffer's put/call open interest ratio spiked to 0.72 following September option expiration and dropped to 0.65 as a result of yesterday's option activity. Furthermore, the number of BAX shares sold short plunged 15 percent over the most recent reporting period to 9.4 million. However, with a short-interest ratio of 4.63, the security could still benefit from a short squeeze.

Technically speaking, BAX has rallied higher since March, making a series of higher lows. The stock also continues to enjoy the support of its 10-week moving average. The equity has hit a tough spot at the 30 level; the site of peak put and call open interest in the October series. A solid break higher could force the short sellers to cover their positions while the build-up of puts at this level act as support.

Click the following link to see the Weekly Chart of BAX since June 2002 with 10-Week Moving Average:

http://www.schaeffersresearch.com/wire?ID=8513 .

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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 .