from Schaeffer's option report
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NT:US Nortel Networks Corp
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Schaeffer's Midday Options Update Features Nortel Networks,
Verizon Communications, Intel, Schnitzer Steel, Boeing
Business Editors CINCINNATI--(BUSINESS WIRE)--Jan. 7, 2004 Today's Schaeffer's Midday Options Update Features Nortel Networks (NYSE:NT), Verizon Communications (NYSE:VZ), Intel (NASDAQ:INTC), Schnitzer Steel (NASDAQ:SCHN), Boeing (NYSE:BA). The Midday Options Update contains a brief commentary on the day's most notable activity and a table listing the most active calls and puts for the day. The Midday Options Update is published every day at www.SchaeffersResearch.com - the home of Bernie Schaeffer and Schaeffer's Investment Research. For additional information about this report or to have it delivered to you free via email every day click on the following link. schaeffersresearch.com .
Schaeffer's Midday Options Update
In the absence of economic data today, investors were left to their own devices and sent the market lower by midday. After yesterday's shaky bout of mixed data, investors appear to still be in the throws of mild profit taking while waiting for further clues on the state of the economy arriving in Friday's unemployment report. The Dow Jones Industrial Average plunged just after the market open today as 3M Company and Altria Group led the pullback. Both stocks are down nearly two percent. One bright spot for the blue-chip sector was Boeing's (NYSE:BA) one-percent gain after the aircraft manufacturer confirmed that Canadian-based airline WestJet had ordered seven new 737-700s to add to its fleet.
In other news, shares of Nortel Networks (NYSE:NT) surged seven percent after the company announced that it will provide VoIP (voice over Internet protocol) equipment to Verizon (NYSE:VZ) in a five-year deal. The equity also received an analyst upgrade to "buy." Alternately, shares of retailer Circuit City Stores plunged more than 12 percent after the company announced that same-store sales fell two percent in December.
Intel (NASDAQ:INTC) led the tech-laden Nasdaq into positive ground just before midday. Shares of the semiconductor manufacturer were up 90 cents after an analyst raised his fourth-quarter and 2004 first-quarter earnings-per-share estimates. INTC also received two analyst upgrades to "outperform" from "market perform." The telecom sector received a boost from analyst upgrades today as Nokia jumped 2.3 percent after two analysts upgraded the security to a "buy" citing a "tidal wave of handset demand" that should buttress earnings momentum.
The aforementioned deal between Nortel Networks and Verizon Communications, estimated to be worth at least $100 million, is tentatively termed for the next 12 to 18 months. Options investors have reacted in force, sending 16,589 call contracts across the tape on NT's January 5 call. While pessimism hasn't been overwhelming for the stock, short interest does stand at a hefty 89 million shares. At the equity's current daily trading volume, investors find themselves with nearly six days to cover these bearish bets. What's more, according to Zacks, 20 of the 28 analysts following NT rate the shares a "hold" |
