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Intra-day swings has stocks unchanged

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After a lower open and a move back to the upside, the major market averages hold modest gains, but hover right near the unchanged level in another round of light volume trading.

Among the most actively traded issue, the NASDAQ-100 Tracking Stock (AMEX:QQQ) $25.81 +0.93% is the most actively traded issue, with Intel (NASDAQ:INTC) $18.20 +0.33%, Cisco Systems (NASDAQ:CSCO) $13.97 +0.21% and Lucent (NYSE:LU) $1.46 +3.52% all trading just over the 32 million share mark.

Shares of Seagate Technology (NYSE:STX) $11.58 -3.50% are the second most actively traded stock on the NYSE, behind Lucent (LU), after today's IPO that was priced at $12 per share. Previous indications for pricing were between $13 and $15 per share.

Shares of healthclub/fitness services provider Bally Total Fitness (NYSE:BFT) $6.95 -18.3% are losing some weight and hold today's number 3 biggest losing position, after the company announced its CFO Lee Hillman will retire from the company. BFT said Hillman will be succeeded by COO Paul Toback. In connection with Hillman's retirement, the company will incur a non-recurring after-tax charge of about $5.8 million ($0.17 per share), of which $2 million relates to various stock grants, and will have cash payments totaling about $1.9 million through Q1.

Shares of e-tailer eBay Inc. (NASDAQ:EBAY) $68.11 -0.13 slipped lower in the past hour after CNBC reported that the company was hit by a credit card scam. According to Reuters, fraudsters apparently tried to steal credit card information from eBay's customers by setting up a fake Web site that mimicked eBay's site. The scam involved e-mails that asked recipients to log on to a Florida-based Web site, "ebayupdates.com," and re-enter financial data for eBay.

Shares of software maker Rational Software (NASDAQ:RATL) $10.56 +2.62% have broken above the $10.50 level on rumor that Microsoft (NASDAQ:MSFT) $54.55 +0.99% may try and outbid IBM (NYSE:IBM) $81.19 +0.45%. On December 6th, IBM announced it had entered into a definitive agreement with RATL to acquire to software maker for approximately $2.1 billion in cash, or $10.50 per share.

Beverage giant and Dow component Coca Cola (NYSE:KO) $46.27 -0.49% have lost some fizz from a morning high of $46.80 after a late-morning call by Morgan Stanley that it was reducing its volume estimates for Coke-Japan to flat from its previous estimate of +4% growth. Morgan Stanley notes that North America and Japan account for more than 40% of profits and believes that volume trends are coming in below plan. Morgan reduced its Q4 estiamtes on KO by a penny to $0.39, which is a penny below consensus EPS of $0.40.

Sector action is mixed with the CBOE Internet Index (INX.X) 97.33 +3.36% holding top spot in our sector gainer list, with the Morgan Stanely Healthcare Index (RXH.X) 286 +1.86%, GSTI Software Index (GSO.X) 106.77 +1.42% and S&P Insurance Index (IUX.X) 265 +1.35% adding some gains. Software maker Symantec (NASDAQ:SYMC) $42.81 +4.74% leads software gains after Goldman Sachs upgraded the stock to "outperform" from "in line" late this morning.

Downside sector action has the Oil Service Index (OSX.X) 87.30 -1.47% after Fulcrum initiated coverage of various oil service companies with "sell" ratings. Among Fulcrum's "sell" candidates are (BHI, BJS, CAM, DO, ESV, GSF, NE, RDC, RIG, SLB, SII, UCO, VRC and WFT). Fulcrum's bearish outlook was related to its belief that a more gradual recovery in N. American E&P spending in 2003, likely dowside pricing pressure for oil & gas prices in 2003, continued erosion in oil services pricing in 2003, a 2003 group earnings outlook that has Fulcrum 29% below consensus, and lofty valuations.

Adding to some selling in the services group is Moody's downgrading Schlumberger's (NYSE:SLB) $44.46 -1.89% senior unsecured debt rating to A1 from Aa3, based on lower than expected future cash flow from its IT services segment over the long-term, the company's relatively high financial leverage when compared to tis Aa-rated peers, limited near-term opportunities to realize a material improvement in cash flow from its oilfield services operations, and a fairly high degree of execution risk related to planned asset divestitures.

Jeff Bailey

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