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1302 ET 10June2009 Allos option vols moving up ahead of presentation
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A number of option investors appear to be bracing for share price turbulence
in Allos Therapeutics (ALTH.O) as they scoop up its bearish put options. The
stock's option implied volatility, a key driver of an options price, stood at
75 percent up from about 72 percent the previous session ahead of a
presentation at a Needham Life Sciences conference on Wednesday. Its shares
fell 1.34 percent to $7.36 in afternoon trade and its October out-of-the-money
$2.50 puts are among the busiest contracts. The 4,200 contracts traded in that
strike include a purchase of 3,960 contracts for an average premium of of 27.5
cents per contract, said WhatsTrading.com option strategist Frederic Ruffy. He
also noted that it appeared another player might have sold January 2010 $5
puts, perhaps closing an existing position, as open interest is 8,201. In all,
6,815 puts traded vs. zero calls as sentiment based on order flow is 61 percent
bearish, according to Trade Alert.
1248 ET 10June2009-Is the rally's correction zone 1,400?
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If history is any guide, this year's U.S. stock market rally closely
parallels the market of 27 years ago, according to analysts at market research
firm Birinyi Associates in Stamford, Connecticut.
On a purely superficial basis, the market most resembles 2009 is 1982, they
said in a note. The first correction (10 percent decline) then did not occur
until 10/10/83 or 424 days into the rally at which point the market was up 69
percent from the bottom.
"While we doubt that there will be a mirror image of that experience, a
2009 replay would mean the rally continues until May 7, 2010 when the market
would have had a 69 percent rise."
Going one step further in historical parallels, the 39 percent gain in 92
days suggests that the market could ultimately trade to 1,400 in the S&P 500
.SPX and peak in September 2011.
Reuters Messaging rm://ellis.mnyandu.reuters.com@reuters.net
1225 ET 10June2009-Short bets in wireless equipment companies up-UBS
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Short interest in wireless equipment companies increased in the last two
weeks of May by 9 percent, UBS Investment Research said in a research note on
Wednesday.
Short positions are when investors borrow a stock and sell it with the
expectation they will be able to buy it back at a lower price, pocketing the
difference. However, if the stock rises, investors may be forced to buy it at
the higher price. This pushes the stock up even higher and is called a "short
squeeze".
Nokia (NOK.N) and Research In Motion (RIM.TO) (RIMM.O) both saw a
significant increase in short interest, with Nokia rising 43 percent, UBS said.
BlackBerry maker RIM saw 5 percent increase in short interest in the period
before the launch dates of smartphones from Palm (PALM.O) and Apple (AAPL.O).
Short interest in Palm, meanwhile, increased by just 1 percent leading up
to the launch of its Pre, its new device which went on sale at the beginning of
June.
Qualcomm (QCOM.O) and Motorola (MOT.N) were also little changed, with short
interest falling 1 percent and gaining 1 percent, respectively.
Reuters Messaging: leah.schnurr.reuters.com@reuters.net
1202 ET 10June2009-DA Davidson: high oil prices could hurt recovery
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DA Davidson on Wednesday wrote that crude oil prices, which "act as a
direct, broad-based tax that impedes consumer spending on other items," could
slow or delay an economic recovery in spite of federal economic stimulus
spending.
"Most investors appear to be anticipating the recession bottoming out this
summer and a quick economic rebound in the fourth quarter," the firm wrote.
"Rising oil prices are one force that could lengthen the recession and add a
growing dimension of pain to many American families. If oil prices suddenly
race up to $100 per barrel, a sustainable consumer led economic recovery would
be difficult to achieve.
"Bottom-line, rising oil prices combined with the continuing rise in
10-year Treasury note yields are becoming near-term equity market concerns," it
wrote.
Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net
1144 ET 10June2009 Goldman suggests RIM call spreads ahead of earnings
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Call spreads in Research in Motion Ltd (RIM.TO) (RIMM.O) look attractive
for upside leverage at reduced cost as either an overlay on long stock
positions or outright options strategy ahead of June 18 earnings, said Goldman
Sachs derivative strategists in a note. Goldman raised its price target on RIM
and reiterated its "conviction buy" rating on shares of the Blackberry maker,
citing increased shipments in the smartphone market and stable gross margins.
"Strong smartphone unit growth could drive upside to consensus estimates and
P/E multiple expansion given discount valuation versus key peers," the note
said. Option prices have fallen in absolute terms but remain high vs the Nasdaq
100 index .NDX. Consistent with Goldman analyst's positive outlook, the skew
is at a 1-year low, making calls comparatively expensive. The strategists
suggests buying July $85/$95 call spreads for upside in a wide range at reduced
cost. With shares at $82.02, the strategy costs $3.10.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1122 ET 10June2009-Markets fall on concerns about high oil
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Major U.S. indexes fell on Wednesday, on concerns that surging oil prices
could hurt an economic recovery, pulling down shares of technology companies
and big manufacturers.
For details, see [ID:nN10407828]
The Dow Jones industrial average .DJI fell 0.3 percent to 8,736.68 while
the S&P 500 .SPX lost 0.5 percent to 938.15 and the Nasdaq .IXIC was off
1.2 percent to 1,838.50.
Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net
1113 ET 10June2009-99 Cents Only climbs after earnings
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Discount retailer 99 Cents Only (NDN.N) shares jumped on Wednesday after
the company reported better-than-expected fourth-quarter earnings, citing
increased sales and and improvements in operating efficiencies.
The company reported consolidated earnings of 10 cents per share on revenue
of $329.2 million, topping Wall Street estimates of 4 cents per share and
$323.8 million in revenue.
For 2010, 99 Cents Only believes the current economic environment will
continue to generate opportunities for the company, but noted that it would be
pleased to maintain the profitability generated in the fourth-quarter.
Shares climbed 13 percent to $12.13. Fellow discount retailers Family
Dollar Stores Inc (FDO.N) shed 1.1 percent to $30.52, Dollar Tree Inc (DLTR.O)
slipped 0.4 percent to $44.14 while Big Lots Inc (BIG.N) dropped 2.6 percent to
$23.59.
Reuters Messaging:rm://Charles.mikolajczak.reuters.com@reuters.net
