Schaeffer's Midday Options Update Microsoft, Walt Disney, Eastman Kodak, Juniper Networks, General Motors.

Business Editors

CINCINNATI--(BUSINESS WIRE)--Feb. 9, 2004

Today's Schaeffer's Midday Options Update Features Microsoft (Nasdaq:MSFT), Walt Disney (NYSE:DIS), Eastman Kodak (NYSE:EK), Juniper Networks (Nasdaq:JNPR), and General Motors (NYSE:GM). 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/addinfo.

Schaeffer's Midday Options Update

The market is hovering close to breakeven this afternoon as investors sift through the deluge of deals and acquisitions that were announced this morning. Starting off with the blue chips, Microsoft (Nasdaq:MSFT) struck a multi-year deal with Walt Disney (NYSE:DIS) to improve quality and security of digital content that can be delivered to homes through the Internet. What's more, Eastman Kodak (NYSE:EK) reported plans to sell its remote sensing systems business to ITT Industries for $725 million.

In other news, Juniper Networks (Nasdaq:JNPR) announced that it would acquire NetScreen Technologies in an all-stock deal valued at $4 billion. Blue Rhino has also agreed to be acquired by Ferrellgas for about $340 million, or $17 per share, in cash. Meanwhile, Boyd Gaming will purchase Coast Casinos for approximately $1.3 billion. In the realm of possible acquisitions, Vodafone confirmed speculation that it is reviewing a possible bid for AT&T Wireless.

In earnings news, Hasbro reported fourth-quarter earnings of $76.6 million, or 43 cents per share. This is an improvement over earnings of 36 cents per share for the same period a year ago. Revenue for the period rose 13 percent to $1.12 billion compared to the Street estimate of $1.06 billion. InterActiveCorp also posted fourth-quarter earnings of $153 million, or 20 cents per share, versus its 30-cent profit for the same period a year ago. Excluding items, the company earned 29 cents per share compared to the Street estimate of 23 cents per share. Revenue soared 36 percent during the quarter to $1.81 billion versus the consensus estimate of $1.78 billion.

At 1:17 p.m. eastern time, the Dow Jones Industrial Average (DJIA - 10599.8) is up 0.07 percent and the S&P 500 Index (SPX - 1142.87) is higher by 0.01 percent. The Nasdaq Composite (COMP - 2071.3) is up 0.36 percent. At 1:18 p.m. in the options pits, 1,392,223 calls and 851,064 puts traded for a composite put/call ratio across all five exchanges of 0.61. The CBOE put/call ratio for equity options weighed in at 0.60.

General Motors (NYSE:GM) makes an appearance on our list of most-active puts this afternoon. The security has seen more than 3,400 contracts change hands at its March 45 strike. However, we shall have to wait until tomorrow to see if this volume translates into new positions since open interest for this back-month option already sits at roughly 7,300 contracts. Overall, sentiment toward the automobile manufacturer has been growing more pessimistic. The stock's put/call volume ratio has been on the rise from its December 8 low of 0.25 to its current reading of 1.17. This indicates that puts are trading at a faster rate that calls in the front three months of options. Furthermore, the security's Schaeffer's put/call open interest ratio has climbed from its January 20 low of 1.10 to its current reading of 1.20.

And despite short interest dipping two percent in January, this accumulation of bearish bets is almost eight times the stock's average daily trading volume. A rush to cover these positions could cause a short-squeeze situation, driving the security steadily higher. Wall Street is harboring its doubts as well, with seven of the 16 analysts following the firm rating it a "hold" and two rating the stock a "sell."

Technically speaking, it looks like GM may still have some fight left in it. The stock recently pulled back to support at the site of its gap higher on December 9 and has now begun to climb higher. Support at this level should continue to hold, if the shares were to tumble again. Furthermore, the equity's 20-week moving average is also close by to help the shares continue their rally. GM has not suffered a weekly close below this intermediate-term trendline since late May. A continuation of the security's rally could force skeptics to unload their pessimistic positions on this under-loved stock and jump on its bandwagon.

Click the following link to see the Weekly Chart of GM since May 2003 with 20-Week Moving Average: http://www.schaeffersresearch.com/wire?ID=9428 .

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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 .