kennyraven: Options Expirations Send Stocks Higher
By THE ASSOCIATED PRESS
Filed at 9:54 a.m. ET
NEW YORK (AP) -- Stocks opened mostly higher Friday in heavy trading, as the expiration of options contracts led to a surge in buying.
Friday was one of the year's four ''triple-witching days,'' so called because three kinds of options contracts expire. Historically, the days have meant higher than usual volume and an upswing in stocks.
Decent economic news and a decline in oil prices also helped stocks. A barrel of light crude was quoted at $59.62, down 37 cents, in electronic pre-opening trading on the New York Mercantile Exchange.
America's deficit in the broadest measure of international trade showed a slight improvement in the July-September quarter, although it was still at the third-highest level in history. The current account deficit includes not only sales of merchandise and services but also investment flows and foreign aid. The current account deficit must be financed by convincing foreigners to hold more dollars, which they invest in U.S. stocks, bonds and Treasury securities.
So far, the country has not had trouble attracting those investments but the fear is that at some point foreigners will slow their purchases of dollar-denominated investments. If such a change occurs abruptly, it could send the dollar plunging against other currencies, send interest rates higher and push stocks down sharply.
In the first hour of trading, the Dow Jones industrial average rose 24.34, or 0.22 percent, to 10,906.01.
Broader stock indicators were barely mixed. The Standard & Poor's 500 index rose 2.14, or 0.17 percent, to 1,273.08, and the Nasdaq composite index fell 0.97, or 0.04 percent, to 2,259.66.
Bonds prices rose, with the yield on the 10-year Treasury note falling to 4.43 percent from 4.47 percent late Wednesday. The U.S. dollar was lower against other major currencies in European trading. Gold prices also declined.
In company news, Martha Stewart Living Omnimedia Inc. rose 5 cents to $19.55 after it said its chief financial and administrative officer will resign in March and will be replaced temporarily as chief financial officer by its vice president for finance and investor relations. James Follo, 45, will leave the media and home goods company after it files its annual report for 2005 with the Securities and Exchange Commission.
Adobe Systems Inc. rose $3.10 to $38.03 after the company, which makes software such as Acrobat for creating digital documents, posted higher fourth-quarter earnings. It said it will cut 650 to 700 jobs as it integrates recently acquired rival Macromedia Inc. Adobe also said Chief Financial Officer Murray Demo is resigning to spend more time with his family.
The Russell 2000 index of smaller companies rose 0.80, or 0.12 percent, to 685.54.
Overseas, Japan's Nikkei stock average fell 0.53 percent. In afternoon trading, Britain's FTSE 100 was up 0.72 percent, Germany's DAX index was up 0.87 percent, and France's CAC-40 was up 0.73 percent.
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