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1614 ET 10June2009 Option bulls circle BJ Services, led by July $17.50 calls
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Oilfield services company BJ Services Co (BJS.N) shares rose 8 cents to
$15.58 after hitting an earlier low of $15.01. In the options market, investors
were seen taking bullish stances on the company amid improvements seen in
demand and the price of oil, said Andrew Wilkinson, senior market analyst at
Interactive Brokers Group in a note. He noticed the July $17.50 strike
attracted some 32,000 calls purchased for an average premium of 53 cents per
contract. Traders long of the calls will be looking for shares of BJ Services
to breach the break even point at $18.03 by expiration next month. The price of
the stock will need to improve about 15.7 percent before investors strike black
gold, Wilkinson said. In all, about 55,000 calls crossed the tape compared with
6,750 puts, according to Trade Alert. Sentiment based on order flow was 71
percent bullish.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1547 ET 10June2009 US Oil Fund ET option volume swells as crude oil rises
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About 113,000 option contracts traded on the exchange-traded fund US Oil
Fund (USO.P), which tracks crude oil through futures, double the norm. USO
shares rose 1.96 percent to $38.94 near the close after crude oil futures
settled at the highest level in seven months, buoyed by a larger-than-expected
drawdown in crude oil inventories last week. On the New York Mercantile
Exchange, crude for July delivery settled up 1.89 percent at $71.33 a barrel.
In the options market, the July $38 puts and calls were the busiest, after one
strategist sold a so-called straddle 8,000 times for a premium of $4.30,
perhaps on a bet the rally will stall and the fund will stay near these levels
over the next few weeks, said Frederic Ruffy, options strategist at
WhatsTrading.com. Another 11,000 January $35-$39 call spreads also traded. He
noted the spread was sold in morning trade for $2.05 and $2.10, perhaps in a
roll of a bullish position in the $35 strike to the higher $39 strike.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1534 ET 10June2009-S&P 500 .SPX heads for key technical milestone
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Despite the U.S. stock market sell-off on Wednesday, the benchmark S&P 500
.SPX was on course for its 8th straight daily close above its 200-day moving
average, the longest such streak since the fall of 2007, when the market soared
to records.
The 200-day moving average is a key measure of the market's technical
strength.
Reuters Messaging: ellis.mnyandu.reuters.com@reuters.net
1459 ET 10June2009 Option players seek Treasury bond ETF calls
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Shares of iShares Trust Barclays Capital 20+ Year U.S. Treasury Index
(TLT.P) dropped 1.25 percent to $88.49 as Treasury prices fell, sending
benchmark yields to 4 percent for the first time in eight months after an
auction of 10-year notes. This morning, a top option trade in the
exchange-traded fund, which tracks bonds with longer maturities in the Treasury
market, appeared to be a position looking for a rebound in bond prices. The
fund's shares drop when long-term interest rates and yields move higher while
bond prices fall. In the June $92 TLT calls, 8,000 contracts traded on the
International Securities Exchange for a premium of 50 cents per contract from
an opening customer buyer, according to sentiment data, said WhatsTrading.com
strategist Frederic Ruffy. About 41,000 calls traded vs. 15,000 puts in the
TLT, four times the combined daily volume. The calls bought would amass a
profit if TLT rises past $92.50 by expiration. Volume in that strike rose to
11,706 lots vs. open interest of 3,014, Reuters data show.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1418 ET 10June2009-Mortgage rates pull down home loan aps: MBA
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Spiking U.S. mortgage rates drove down total home loan applications last
week as demand for refinancing shriveled to the lowest level since November,
the Mortgage Bankers Association said on Wednesday.
The average 30-year fixed mortgage rate jumped 0.32 percentage point in the
June 5 week to 5.57 percent. That was nearly a full point, about 100 basis
points, above the record low rate of 4.61 percent in March, the trade group
said.
"Clearly, 50 or 100 basis points more on mortgage rates is enough to
matter. It effects what people can afford to buy," said Bill Cheney, chief
economist at John Hancock Financial Services in Boston. [ID:nN10429234]
Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net
1416 ET 10June2009-Markets slide after Fed Beige book
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Major U.S. indexes fell on Wednesday, nearing session lows after the U.S.
Federal Reserve release its snapshot of regional economic activity showing
conditions stayed weak or worsened in May.
The report added to worries about surging oil prices and the specter of
rising interest rates.
For details, see [ID:nN10453741]
The Dow Jones industrial average .DJI fell 1.1 percent to 8,671.16 while
the S&P 500 .SPX lost 1.2 percent to 931.50 and the Nasdaq .IXIC was off
1.4 percent to 1,834.13.
Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net
1409 ET 10June2009-Raymond James downgrades JA Solar
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Raymond James on Wednesday downgraded JA Solar Holdings (JASO.O) to market
perform from outperform, citing valuation in relation to its peers.
The firm wrote that the stock had a valuation of about 21 times its 2010
profit view, a premium to the average of its peers of about 17.5 times.
"While we have been pleasantly surprised by the magnitude of JA Solar's
gains in less than a month, we believe that the shares are near fair value, and
thus we would advise taking some profits off the table at this time," the firm
wrote to clients.
For details, see [ID:nBNG451154]
Shares of JA Solar slid 0.2 percent to $5.97.
Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net
1406 ET 10June2009-Goldman CEO sees long, protracted recession
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Lloyd Blankfein, the chief executive officer of Goldman Sachs (GS.N), on
Wednesday said he expects the current economic recession to be a "long,
protracted" one.
Addressing a current upturn in markets, he said: "There is no reason to
think this is it ... so many things have to be sorted out. Why would this be
the recovery? The chances are it's not."
Shares of Goldman slid 1.2 percent to $147.46.
Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net
