Schaeffer's S&P 500 Index Hot Stocks Features Tellabs, Walgreen Co., Wal-Mart Stores, Burlington Resources and EOG Resources.

CINCINNATI -- Among the stocks featured in the January 3 edition of Schaeffer's S&P 500 Index Hot Stocks are Tellabs (NASDAQ:TLAB), Walgreen Co. (NYSE:WAG), Wal-Mart Stores (NYSE:WMT), Burlington Resources (NYSE:BR) and EOG Resources (NYSE:EOG). Schaeffer's S&P 500 Index Hot Stocks is just one of the many free market commentaries written everyday 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=PRSHS1M&PAGE=1

Schaeffer's S&P 500 Index Hot Stocks for Monday, January 3, 2005:

A daily feature available on SchaeffersResearch.com is the "SPX Hot Stocks" column. Each afternoon immediately prior to the close, we will provide a list of the day's top-20 performing stocks in the S&P 500 Index (SPX - 1,215.77) as well as the bottom-20 names. Featured along with this table will be news that is moving some of the shares.

News has picked up today as investors are re-acclimating themselves to action following two straight holiday weekends. Trading on the S&P 500 Index has been sluggish, losing 0.50 percent thus far today.

NOTE: Stocks trading under $5 per share have been eliminated from this listing of the top-20 and bottom-20 performing stocks.

The first hot stocks list of the New Year sees Tellabs (NASDAQ:TLAB) perched on top. TLAB surged to its spot thanks to an upgrade and target price change from Robert W. Baird. The brokerage firm upped TLAB to "outperform" from "neutral" while it raised its target price on TLAB to $11 from $9. The upgrade was attributed to the belief that TLAB will top its fourth-quarter revenue while reporting solid bookings thanks to improved international and fiber-to-the-premise business. Finally, Baird sees TLAB's acquisition of Vinci Systems as a benefit for the company.

Walgreen Co. (NYSE:WAG) finds itself in the second slot in the hot stocks list thanks to a positive first-quarter earnings report. WAG announced that it earned 31 cents per share in the quarter, topping the consensus estimate for earnings of 29 cents per share. WAG cited healthy prescription and merchandise sales along with higher gross margin profits for the positive earnings. The major reason for the increase in margin profits is the conversion of the company's analog photo labs to the digital format, thus reducing the cost of goods while adding to the labor expense line. These gains will offset the rising costs from the said conversion. More information on WAG's announcement can be found by reading "Walgreen Bests Street."

Like WAG, Wal-Mart Stores (NYSE:WMT) greeted the New Year with good news for investors. Today, the world's largest retailer announced that its December same-store sales should increase by three percent. This follows last week's announcement that the company expected its sales to hit the middle of the previously forecast growth of one-to-three percent. WMT attributes this growth to higher-than-expected food and general merchandise sales coupled with a higher rate of gift card redemption compared to last year. WMT piled on more good news when it announced that its sales for the past weekend were higher than originally expected.

Both Burlington Resources (NYSE:BR) and EOG Resources (NYSE:EOG) have fallen to the bottom of our hot stocks list today thanks to unseasonably warm weather. In an article on Dow Jones Newswire, an analyst at Deutsche Bank Securities stated that it is "not forecast to be cold for 15 days. That's enough, along with the 10 days we've already had of warm weather, to tell you winter probably won't be a big event." This is not good news to BR or EOG, both of whom specialize in independent exploration and production. While demand is not where it should be and the weather could be colder, the analyst remains bullish toward the group. This revelation has done little to calm the nerves of skittish investors.

Click the following link to see a Chart of the SPX 500 Index's Top 20 Percentage Gainers: http://www.schaeffersresearch.com/wire?ID=12170

Click the following link to see a Chart of the SPX 500 Index's Top 20 Percentage Losers: http://www.schaeffersresearch.com/wire?ID=12170

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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.