Stocks on the move [HOT-RTRS] Real-time Equity news [U E] [RESF/US]
U.S. stock market report [.N]
1516 ET-26Jan2009 -Players eye puts in American Express ahead of earnings
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As shares of American Express (AXP.N) fell 4.37 percent to $15.30 in late
trade before it reports earnings after the bell, the equity's put/call ratio
gives the picture away at 2.37 puts traded for every call, said Andrew
Wilkinson, senior market analyst at Interactive Brokers Group. In a note to
clients, Wilkinson said put volume popped up at the February $10 and $15
strikes where volume of 5,000 contracts has gone through at each strike price.
The March $15 puts and the April $10 strike have also been bought with the
latter predicting a breakeven share price in April of $9.25. The July $10
strike puts are also in demand in excess of an established open interest
reading of less than 600 contracts, he said.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1456 ET 26Jan2009-Goldman prefer to stay long volatility into earnings season
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Goldman Sachs strategists said they prefer to remain long volatility moving
into earnings season in a note to clients. Earlier this month, they recommended
buying S&P 500 out-of-the- money Feb 09 830 put strikes and buying a February
futures contract on the CBOE volatility index .VIX, the 30-day risk forecast,
vs. selling a June VIX futures contract. Both trades are up modestly. "Risks
remain for long vol positions. If the equity market has already priced earnings
and trades positive on (fiscal) stimulus then implieds could drop quickly,"
they said. While they still would continue to hold both positions, they said
their conviction level on the put trade is now much higher than the VIX trade.
"Any shift in sentiment or decline in realized volatility could pull the VIX
(and VIX futures) down even if the S&P 500 grinds slowly lower," they said.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
1449 ET 26Jan2009-Dudack: Real estate prices going back to normal
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Dudack Research Group on Monday said that based on a fall in December home
prices, which were down 4.3 percent in the month, its home price to income
ratio fell to 6.83, its lowest level since April 2001, a rate it said "was good
news for homeowners."
The ratio suggests "that residential real estate prices are moving back to
normal relationships to income. The risk to the housing market in 2009 is the
weakness in the job market," it wrote.
Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net
1442 ET 26Jan2009-Thain: BofA knew about Merrill's loses, bonuses
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John Thain, the former chief executive of Merrill Lynch, on Monday said
that Bank of America (BAC.N) knew about Merrill's losses and bonuses before it
purchased the company this past year.
According to a memo to Merrill employees, Thain plans to reimburse Bank of
America for $1.2 million spent to renovate his office. [ID:nN26365400]
Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net
1438 ET 26Jan2009-S&P sees losses in Freddie Mac's prime mortgages
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Standard & Poor's Equity Research on Monday increased its loss estimates on
Freddie Mac (FRE.N), estimating that the company will need another $30 billion
to $35 billion from the $100 billion purchase agreement from the U.S. Treasury
in order to maintain a positive net worth.
"We believe that losses are now beginning to spread to prime mortgages in
Freddie's portfolio. In the month of December alone, the delinquency rate for
the company's single-family home loans jumped 20 basis points to 1.72 percent,"
it wrote.
The firm forecast a loss of $24.98 a share for the company in the fourth
quarter and a loss of $25.50 a share for 2009. It previously saw a loss of
$2.44 a share for the fourth quarter and $3.92 a share for 2009.
S&P Equity Research affirmed its $1 price target on Freddie Mac, shares of
which dropped 5.9 percent to 64 cents on Monday.
Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net
1434 ET 26Jan2009-Top SEC officials to testify at Madoff hearing
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Several top people at the Securities and Exchange Commission -- including
Linda Thomsen, the SEC's director of enforcement and Lori Richard, director of
compliance, inspections and examinations -- will testify at a Congressional
hearing into Bernard Madoff's alleged $50 billion fraud, the Senate Banking
Committee said on Monday.
The SEC has been criticized for failing to uncover what could be one of the
biggest frauds in history. [ID:nN26385622]
Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net
1424 ET 26Jan2009-Food companies up after Tyson Foods results
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Shares of food companies rose on Monday after Tyson Foods (TSN.N) said
results at its chicken unit improved because of higher meat prices and lower
costs. It also posted a first-quarter loss that was wider than expected.
[ID:nN26352317]
The stock rose 2.7 percent to $8.89. Among its peers, Dean Foods (DF.N) was
up 1.7 percent to $19.54, McCormick & Co (MKC.N) added 2.4 percent to $31.16
and Ralcorp (RAH.N) was up 1.2 percent to $59.08.
Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net
1418 ET 26Jan2009-Wells Fargo attracts put sellers - analyst
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Wells Fargo & Co (WFC.N) has attracted some aggressive put selling in front
of Wednesday's earnings as some traders may be cashing in their positions. The
bank's shares dipped 1.51 percent to $15.63 in afternoon trade. According to
Trade Alert, nearly 32,000 Feb $15 puts have traded, with most the volume on
the bid and implied volatility at the strike dropping nearly 16 points to 135
percent, Trade Alert president Henry Schwartz said. With 41,000 contracts of
open interest, Schwartz surmised the seller or sellers may be closing out
positions and taking money off the table ahead of the news. Most of the open
interest was put on earlier this month when Wells Fargo shares were near $20,
he said.
Reuters Messaging: doris.frankel.reuters.com@reuters.net
