STOCKS NEWS US-Credit Suisse suggests PepsiCo call spread

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1156 ET 01July2009 Credit Suisse recommends PepsiCo call spread
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A call spread in PepsiCo Inc (PEP.N) is attractive to capture upside
exposure in the company and benefits from the flat skew and lower implied
volatility, said Credit Suisse equity derivatives strategist Sveinn Palsson in
a note. He recommends a January 2010 PEP $60-$65 call spread for $1.10, using a
reference price of $54.91. "The dominant discussion surrounding PepsiCo remains
the premium it should offer to buy its bottlers, where the achievable synergies
remains the main debate," the note said. "PepsiCo estimates $200 million in
synergies nearly four times less than what its largest bottler, Pepsi Bottling
(PBG.N) estimates." But Credit Suisse beverage analyst Carlos Laboy believes
this overshadows the main point, as even PepsiCo's conservative synergy
estimates can lead to a significant rise in its share price. Even if a deal
does not materialize, Laboy sees limited downside, since PEP trades at a
discount to the market, including a 7 percent discount to rival, Coca Cola.
Palsson said.

Reuters Messaging: doris.frankel.reuters.com@reuters.net
1144 ET 01July2009-Oracle shares rise after Caris starts coverage
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Shares of Oracle Corp (ORCL.O) rose on Wednesday, after Caris & Co started
coverage on the software company with an "above average" rating.

The firm wrote that Oracle was well positioned to benefit from any recovery
in global IT spending and can elevate its market position with the purchase of
Sun Microsystems Inc (JAVA.O).

For details, see [ID:nBNG490467]

Shares rose 2.1 percent to $21.87.

Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net
1134 ET 01July2009-Synnex climbs on earnings, outlook
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Synnex Corp (SNX.N) shares rose on Wednesday after the company reported
second-quarter results and forecast third-quarter results above Wall Street
estimates. [ID:nBNG507931]

The technology distributor reported net income of 57 cents a share, aided
by a 20 percent gain in its global business services revenue, topping the
average estimate of analysts surveyed by Thomson Reuters of 48 cents per share.

For the third-quarter, the company sees earnings of 58 cents to 61 cents a
share on revenue of $1.8 to $1.9 billion versus Wall Street expectations of 50
cents per share and $1.75 billion in revenue.

Synnex shares jumped 10 percent to $27.50. Rivals Ingram Micro (IM.N) added
2.7 percent to $17.97 and Tech Data (TECD.O) gained 2.4 percent to $33.49.

Reuters Messaging:rm://Charles.mikolajczak.reuters.com@reuters.net
1120 ET 01July2009-ISM's Ore: growth in manufacturing 3 months away
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The U.S. manufacturing sector is improving but it will probably take
another three months to get it back into growth territory, Norbert Ore,
chairman of the Institute for Supply Management's manufacturing business survey
committee, said on Wednesday.

Ore also told a teleconference of journalists that deflationary pressures
in the manufacturing sector appeared to be abating, though the rise in oil
prices had helped to stop the decline in companies' pricing power.

Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net
1110 ET 01July2009-Goldman: Sell Alcoa covered calls to enhance return on long
stock positions
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Alcoa Inc (AA.N) is due to report quarterly earnings on July 8. Goldman
Sachs' volatility compass shows Alcoa as very sensitive to equity growth
appetite and commodity prices while options screen eight points higher than
expected based on those factor sensitivities, said Goldman Sachs derivative
strategists in a weekly Options Watch. The stock's implied volatility level is
nearly double its long-term average. They recommend buying stock and selling
October $12.50 covered calls for 58 cents to retain 27 percent upside current
levels if shares are called away at $12.50 at expiration. "Our analysis of
materials returns and volatility through the business cycle suggests that
aluminum stocks should continue to outperform as the ISM moves to and above
50," the note said. GS steel, metals and mining analyst rates Alcoa buy as
rising aluminum spot prices are nearing cash costs and past instances of a
widening in the spot price less cash cost spread have been positive for
shares.

Reuters Messaging: doris.frankel.reuters.com@reuters.net