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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 outsized 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
1138 ET 25June2009-Kimberly-Clark to cut 1,600 jobs
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Kimberly-Clark Corp (KMB.N) said on Thursday it would cut about 1,600
salaried jobs, or roughly 3 percent of its work force, in a move to become more
competitive. It will also take up to $150 million in charges related to the
cuts.
The consumer products company said the latest round of job cuts would hit
all regions and businesses and would primarily affect salaried and
non-production jobs. The company does not plan to close any manufacturing
facilities. [ID:nN25259264]
Shares edged up 0.2 percent to $51.89.
Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net
1023 ET 25Jun2009-S&P 500's 910 level seen a critical hurdle
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Phase One to neutralizing the short-term downtrend is tentatively in place,
but to change the trend drastically, the benchmark S&P 500 index .SPX needs
to push and hold above the 910.85 level, technical strategists at Instinet said
on Thursday.
"Yesterday the SPX stalled out twice near the 10-day downtrend line and
that's the first key short-term hurdle today (currently at 907)," the analysts
wrote in a note.
Reuters Messaging: ellis.mnyandu.reuters.com@reuters.net
1025 ET 25June2009-Akamai attracts put sellers, analyst
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Shares of Web content delivery service company Akamai Technologies Inc
(AKAM.O) rose 1.2 percent to $19.76 in morning trade. In the option patch, the
February 2010 puts at the $15 line traded 6,472 contracts, compared with 2
contracts of open interest, Reuters data showed.
The day's top trade was 5,372 contracts on the bid for a premium of $1.40
in that strike. It looked like opening put sellers might be initiating the
early trades, according to WhatsTrading.com option strategist Frederic Ruffy.
There was no apparent news on the stock.
Akamai was also the subject of bullish order flow on Monday, he said. Put
selling is viewed as a neutral to bullish strategy.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
