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1252 ET 25June2009-Department stores up after JC Penney upgrade
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Shares of department stores rose on Thursday, after JPMorgan upgraded JC
Penney (JCP.N) to overweight from neutral.
The firm wrote that the retailer would benefit from lower apparel input
costs, stabilization in the high-margin home category sales, and strong
performance by its women's apparel business. For details see [ID:nBNG489288]
JC Penney was up 6.4 percent to $28.30 while the S&P Department Stores
Sub-Industry Index .GSPRETD added 3.4 percent to 116.39.
Among other companies in the index, Nordstrom (JWN.N) rose 2.9 percent to
$19.64, Macy's (M.N) climbed 3.3 percent to $11.76, Sears Holding (SHLD.O) was
up 2.8 percent to $65.36 and Kohl's (KSS.N) gained 2.3 percent to $44.43.
Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net
1231 ET 25June2009 VIX tests lower end of range, support
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The CBOE Volatility Index .VIX, the implied volatility measure of the S&P
500 index .SPX, fell 6.78 percent to $27.08 as U.S. stocks extend gains. The
VIX is challenging the June 11 lows of 26.81 on an intraday basis as well as
the lower Bollinger band line of 26.91, said Scott Fullman, director of
derivative investment strategy at WJB Capital Group. "We are at the lower end
of a two standard deviation move of the 20-day moving average which has acted
an oversold signal for VIX over the past two months." Technically, this could
potentially lead to an upward reversal and a test of the 29.65 level in the
near term, he added. Volatility expectations continue to decline as realized
volatility for the SPX remains relatively tame, said Chris McKhann, analyst at
optionMonster.com in comments on the firm's Web site. The drop in the VIX is
bringing it closer to the historical volatility for the SPX which is down at 21
percent, he said. The two are "intimately tied, as traders can sell higher
volatility and will profit if the realized volatility is lower when the trade
is down, McKhann said.
1214 ET 25June2009-American Reprographics falls after downgrade
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American Reprographics Co (ARP.N) shares slid on Thursday after a Credit
Suisse downgrade based on recent strength in the stock's performance.
The firm lowered its rating on the document-management services company to
"neutral" from outperform," citing the stock's 185 percent gain versus the 25
percent recorded for the S&P 500 since March 11.
Credit Suisse said that it believes the period of out-sized gains in the
near-term are mostly behind and would wait for a better entry point.
Shares fell 5.1 percent to $7.79.
Reuters Messaging: Charles.mikolajczak.reuters.com@reuters.net
1208 ET 25June2009-Abercrombie volume pops up after put spreads likely opened
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Shares of apparel retailer Abercrombie & Fitch Co (ANF.N) rose 19 cents to
$26.18. But in the options market, volume was four times the norm as about
55,000 puts and 168 calls traded. The activity was in the November and August
puts, with an investor apparently opening bearish spreads in both expiration
months: buying the $26 strike and selling the $21 strike, said WhatsTrading.com
option strategist Frederic Ruffy.
The spread traded 13,000 times in the August puts and 14,000 times in
November. All traded on the International Securities Exchange, where sentiment
data indicate 27,000 contracts were opening customer buys, he said. The
investor expects the shares to drop to at least $24 and maximum profit on the
trade would be $21 or less by August or November expiration.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
