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1125 ET 01June2009-Markets rally after data lifts optimism
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Major U.S. indexes advanced on Monday, rallying after strong economic data
bolstered optimism that the worst of the recession may be over.
Despite that, some sentiment was pressured after General Motors GM.N
filed for bankruptcy and was kicked out of the Dow industrial index.
For details, see [ID:nN01467313]
The Dow Jones industrial average .DJI rose 2.4 percent to 8,700.97 while
the S&P 500 .SPX gained 2.5 percent to 941.89 and the Nasdaq .IXIC was up
2.7 percent to 1,821.71.
Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net
1113 ET 01June2009 Option players snap up Zoltek call options
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Shares of advanced materials firm Zoltek Cos Inc (ZOLT.O) bolted 10.2
percent higher to $10.91 in late morning trade. Its option volume is 16 times
the combined daily average, according to Trade Alert. Driving the action is the
buying of the June $7.50 and $10 calls, having earlier traded over 4,200
contracts each with blocks trading at the ask side right from the opening, said
WhatsTrading.com option strategist Frederic Ruffy. While open interest in the
$7.50 strike is sufficient to cover (5,160 lots), this appears to be fresh
buying in both strikes, he said. The stock's option implied volatility rose 5
percent to 82 percent on the day. It was not clear what was driving the bullish
activity.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1107 ET 01June2009-Barclays raises price target on American Express
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Barclays Capital on Monday raised its price target on American Express
Co(AXP.N), lifting it to $28 from $23.
"Recent troubles with rising charge-offs in AmEx's credit card portfolio
have obscured the fact that it still has a number of core businesses that are
generating high returns at this point in the cycle on relatively small amounts
of capital," the firm wrote. "As credit costs normalize in the coming years, it
should bring the value of those segments back into focus, particularly if
management continues to shrink its lending portfolio, releasing the significant
capital that supports those lower return segments."
The firm kept its equal weight rating on the Dow component, saying it was
fairly valued "given the significant risks that still remain for credit card
issuers."
Shares of AmEx rose 5.4 percent to $26.18.
Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net
1056 ET 01June2009 GM June $1 calls becomes option traders favorite
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One of the most actively traded equity options contract early Monday is the
GM $1 call option as 63,944 contracts traded in that strike against previous
open interest of 312,585 lots, according to Reuters data. They fetched 15 cents
a contract, up 5 cents. GM shares fell 13 cents to 88 cents after the automaker
filed for bankruptcy. Before the U.S. financial markets opened, its stock was
removed from the Dow Jones industrial average and will be replaced by Cisco
Systems Inc (CSCO.O). "Premium sellers are dominating the flow and trying to
salvage remaining time value in the June $1 calls," said WhatsTrading.com
option strategist Frederic Ruffy. NYSE suspended GM prior to the opening on
June 2.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1048 ET 01June2009-SunTrust to raise $2.2 bln to plug capital hole
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SunTrust Banks Inc (STI.N), a large U.S. Southeast regional bank, said on
Monday that it planned to raise $2.2 billion of equity capital to plug a hole
identified by federal regulators.
The bank plans to sell $1.4 billion of common stock, raise $300 million of
common equity from selling securities, and raise $250 million of common equity
from buying back up to $1 billion of preferred and hybrid securities for cash.
For details, see [ID:nN01449572]
Shares slid 1.9 percent to $12.92.
Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net
