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Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: Gold Beach who wrote (37008)	6/3/2000 5:24:00 AM
From: Zoltan!	Respond to of 77400

Dow Jones Newswires -- June 2, 2000 Options Report: So Long Fed, The Bear Is Dead (Almost) By STEVEN M. SEARS NEW YORK -- A lot of Wall Street's doubts about the sustainability of the stock market's recent advances were erased Friday by the appearance of a great, bullish omen that prompted many fund managers to re-invest billions of dollars into bullish call options on technology and financial stocks. The Department of Labor's May employment data provided the most important confirmation yet that the Federal Reserve's six previous interest rate hikes were slowing the growth of the economy. Traders and money managers interpreted the report as a sign the Fed would not likely raise rates in the future. And if the Fed does raise rates, the hike is expected to be 25 basis points, half as much as the most recent hike, which Elliot Spar, Gruntal & Co.'s options strategist, said the market could easily handle. "It's a whole new backdrop," said Spar, who expects the stock market will continue to rally at least until Tuesday. Indeed, very few traders and fund managers appeared to take profits on existing positions during Friday's rally, an important development. For weeks, professionals sold securities when the stock market rallied because they correctly expected that the market would decline. Major investment banks maintained large call positions in America Online Inc., Cisco Systems Inc., General Electric Co., Micron Technology Inc. and Microsoft Corp. that were opened Thursday in anticipation of a rally. Major trades - sometimes the equivalent of a million shares of stock - continued Friday. In Microsoft, a firm bullishly sold 10,000 June 60 puts. It appear that the firm was closing a long position that had been purchased to hedge one million shares of while Microsoft battled federal antitrust regulators. As the company awaits the court's ruling, the firm perhaps feels comfortable that Microsoft's stock has returned to its previous support level of 65. Wit the stock up 13/16 at 65 3/8, the June 60 puts fell 1/4 to 1/2 on Chicago Board Options Exchange volume of 10,520 contracts, compared with composite open interest of 15,630 contracts. Elsewhere in the options market: - A firm sold about 5,000 September 60 calls on Ford Motor Co., most probably to leverage a return against an underlying stock position. With the stock down 1 1/8 at 48 3/8, the September 60 calls fell 1/16 to 11/16 on Philadelphia Stock Exchange volume of 5,000 contracts, compared with composite open interest of 2,668 contracts. - The CBOE's Market Volatility Index, or VIX, which measures certain Standard & Poor's 100 option prices to determine investor sentiment, fell 0.62 to 24.12 When the index rises, it shows that traders are getting uptight about the stock market. When the index declines, it shows that traders are optimistic about the stock market. - The CBOE's equity put/call ratio was 0.33. The ratio is traditionally interpreted as a contrarian sentiment indicator, which holds that if too many traders are bullish, then the smart approach is to be bearish. Using this contrarian criteria, the index historically has been considered a bullish sentiment indicator if it is around 0.75 to 1; neutral from 0.40 to 0.75 and bearish if it is below 0.40. - The CBOE's index put/call ratio was 1.51. This ratio is also interpreted as a contrarian sentiment indicator. The index is considered bullish if the ratio is 1.5 or higher; neutral from 0.75 to 1.5 and bearish if it is below 0.75. -By Steven M. Sears, Dow Jones Newswires, 201-938-5355 interactive.wsj.com^CSCO