STOCKS NEWS US-Susquehanna highlights BofA four-way spread

Stocks on the move [HOT-RTRS] Real-time Equity news [U E] [RESF/US]

U.S. stock market report [.N]
1103 ET 27May2009 BofA gets bullish four-way spread on Tuesday
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Bank of America (BAC.N) attracted an interesting August four-way options
spread on Tuesday in which investors sold 15,000 Aug $8 puts to buy 15,000
August $12/$15/$18 call butterflies, said Susquehanna Financial Group in a
note. The spread allowed investors to position for a moderate upside move while
collecting a net 10 cents to enact the trade. These investors appear to be
looking for a move to the $15 level between now and August expiration, while
speculating that a move below the $8 level over that time is unlikely. The max
value of the position ($3.10) is achieved with a $15 stock price at expiration.
Susquehanna looked at the hypothetical profit and loss of the position and the
impact that timing can have on the trade. The maximum profit is not achieved
until expiration, with moves to the $15 level in the interim resulting in a
relatively muted impact to the position's value. Much of the value is achieved
as the short options decay out, with much of that decay taking place close to
expiration. It is worth noting that earnings are expected to be released in mid
to late July, it said.

Reuters Messaging: doris.frankel.reuters.com@reuters.net
1040 ET 27May2009-Discover CEO sees rise in credit defaults
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David Nelms, the chief executive of Discover Financial Services (DFS.N),
forecast a rise in credit defaults in the second quarter on Wednesday, and for
loan growth to slow in the second half of the year.

Nelms expects the charge-off rate -- the percentage of debt the company
does not expect to be repaid -- on a managed basis, to be about 8 percent in
the second quarter.

In the first quarter, Discover's charge-off rate was 6.48 percent.

For details, see [ID:nN27543456]

Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net
1031 ET 27May2009-Apparel index rises after strong results
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The Dow Jones U.S. Apparel Retail Index .DJUSRA rose on Wednesday, after
a number of companies reported better-than-expected quarterly results.

American Eagle Outfitters Inc (AEO.N) posted adjusted first-quarter
earnings that topped estimates by 1 cent per share and said there were early
indications that business was stabilizing. [ID:nN27498568]

Chico's FAS Inc (CHS.N) reported adjusted first-quarter earnings that beat
expectations by 3 cents a share, while Charming Shoppes Inc (CHRS.O) posted a
surprise quarterly profit. [ID:nN27541108]

The index gained 2.4 percent to 275.94, while American Eagle added 4.5
percent to $15.14, Charming rose 4.2 percent to $3.73, and Chico's surged 8.3
percent to $9.58.

Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net
1021 ET 27May2009-M. Stanley upgrades life insurer sector
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Morgan Stanley upgraded the life insurance sector to "attractive" from "in
line" on Wednesday, arguing that "forceful headwinds" like the collapse in
equity market levels seemed to be abating.

The lessening of those headwinds "raises the possibility that we are
entering a new era for the group where traditional metrics including growth and
profitability reemerge as key valuation drivers," the firm wrote.

"While it is unlikely that returns on equity will return to the levels
enjoyed prior to the global credit crisis, we nonetheless expect book values to
move materially higher and return prospects to improve as expense reduction
initiatives begin to take hold and excess liquidity currently held by the group
is put to work, leading the group to outperform the broader S&P 500 .SPX
index," the firm wrote.

Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net
1004 ET 27May2009-Existing home sales up 2.9 pct in April
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The pace of sales of U.S. existing homes rose 2.9 percent in April,
increasing to an annual rate of 4.68 million units. The analyst consensus was
4.66 million units.

For details, see [ID:nN27543642]

The Dow Jones U.S. Home Construction index .DJUSHB rose 2 percent to
231.39.

Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net
0951 ET 27May2009-Staples down after results, peers higher
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Shares of Staples Inc (SPLS.O) fell on Wednesday, after the office supplies
retailer reported first-quarter results. Though its profit beat expectations by
1 cent per share on an adjusted basis, they were down from the prior year.

For details, see [ID:nN26494473]

Staples shares rose 0.2 percent to $20.42, while OfficeMax Inc (OMX.N) rose
1.2 percent to $8.24, and Office Depot Inc (ODP.N) was up 3.4 percent to
$4.27.

Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net
(Editing by Jeffrey Benkoe)