STOCKS NEWS US-Philly Fed factory slump eases in June

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1011 ET 18June2009-Philly Fed factory slump eases in June
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Manufacturing in the U.S. Mid-Atlantic area contracted in June for the
ninth consecutive month but much less severely than expected and far less than
in the previous month, a regional Federal Reserve survey released on Thursday
showed.

The Philadelphia Federal Reserve Bank said its business activity index rose
sharply to minus 2.2 in June from minus 22.6 in May. That was the highest
reading since September 2008, the report said.

That was well above economists' expectations of minus 17, based on the
median of forecasts among economists polled by Reuters.

For details, see [ID:nN18266955]

Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net
1004 ET 18June2009 Equity market volatility expected to fall further-Goldman
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Volatility is expected to decline as the macro economy improves in second
half of 2009, said Goldman Sachs derivative strategists in a note. While the
CBOE Volatility Index .VIX has been falling, the longer-dated S&P 500 options
are forecasting extreme volatility of 30+ for the next five years. Given their
view that equity market volatility should fall dramatically, they recommend
selling longer-dated options to fund core views, the note said. "S&P 500
options are forecasting extreme volatility of 30+ for the next five years;
however, at this point in the business cycle volatility, which is anticipatory,
is typically near its long-run average of 16," they said. For volatility
investors, they suggest selling forward variance to capture volatility falling.
For those looking for leveraged upside, they advise calendar call spreads.
"Looking globally, we would sell S&P 500 options to fund upside in China or
EEM," they said. "Investors looking to hedge should consider put spread collars
and calendar put spreads for low/no upfront cost hedges, the note said.

Reuters Messaging: doris.frankel.reuters.com@reuters.net
0947 ET 18June2009 Trades circle RIM calls in early trade
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Option order flow in Research In Motion (RIMM.O) (RIM.TO) was tilted on the
call side as about 26,000 contracts traded, more than double the put volume in
the first 20 minutes of trade, according to Trade Alert. The BlackBerry maker
is due to report quarterly results after the close. Wednesday's RIM option flow
was triple normal levels and dominated by premium buyers focused on
out-of-the-money June $80 calls and $75 puts, as shares hovered near the $78
range most of the day, said Trade Alert president Henry Schwartz. More than
25,000 of each contract traded, with buyers hoping for a significant move on
today's post-close earnings release, he said. The implied gap-move based on
June option implied volatility is about $6 and both options finished Wednesday
near a $3 premium, with nearly 5,000 contracts of open interest growth in each
contract. But he said total RIM call open interet grew 45,000 contracts, double
the put total. April earnings cycle resulted in a $13 spike in shares, Schwartz
said.

Reuters Messaging: doris.frankel.reuters.com@reuters.net
0930 ET 18June2009-Markets open flat after data, ahead of Geithner
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Major U.S. indexes opened flat on Thursday following a weekly government
report showing a steep drop in the number of people staying on jobless aid.

Besides focusing on the data, investors will also look for what reception
Treasury Secretary Timothy Geithner will get from lawmakers when he testifies
before two Congressional panels on the Obama administration's proposed
financial regulatory reform.

The Dow Jones industrial average .DJI rose 0.1 percent to 8,500.75 while
the S&P 500 .SPX gained 0.1 percent to 911.23 and the Nasdaq .IXIC was flat
at 1,807.45.

Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net
0914 ET 18June2009-HLTH to merge into its WebMD unit
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HLTH Corp HLTH.O on Thursday said it would merge into its subsidiary
WebMD Health Corp (WBMD.O) in an all-stock deal.

As part of the deal, WebMD Class B shares will be retired and each
outstanding share of HLTH common stock will convert into 0.4444 shares of WebMD
Class A common stock.

HLTH currently owns 48.1 million shares of WebMD Class B common stock,
representing about 80 percent of equity of WebMD, which operates the popular
healthcare website of the same name.

"This transaction will eliminate the inefficiencies associated with having
two separate public companies and HLTH stockholders will receive a direct
ownership in WebMD through a tax-free transaction," the companies said.

For details, see [ID:nBNG420714]

WebMD shares closed Wednesday at $28.21 while HLTH closed at $11.76.

Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net