STOCKS NEWS US-Estimates for S&P 500 earnings increasing

Real-time equity news

U.S. stock market report


1201 ET 02May2011
Estimates for S&P 500 earnings increasing

Estimates for earnings for S&P 500 companies are up since the start of the reporting period, according to Thomson Reuters data. Earnings for the first quarter are now expected to rise 17.8 percent from a year ago. That compares with an April 1 forecast for an increase of 13 percent.

About 72 percent of companies are beating earnings esimates, in line with results in recent reporting periods, the data showed.

Reuters Messaging rm://[e-mail]

1158 ET 02May2011
Positives seen for stocks from bin Laden death

The death of Osama Bin Laden should have 'durable positive effects' on stocks, as it reduces global security fears, according to a research note from JPMorgan Chase strategist Thomas Lee.

Equity flows should increase as investors have 'less excuse to see 'risks' in equity,' the note said.

'A second important reason we see equity valuations increase (via lower risk premia) is that terrorism is a tail event, and the framework of asset allocators/macro funds/individual investors was to build 'fat tails'-that is, build greater likelihood of terrorism in their models.

With smaller tails, 'catastrophe' assets like commodities have somewhat diminished value in a portfolio compared to 'relative value' assets like equities (which remain historically cheap versus bonds). In other words, this argues for inflows to increase for stocks.'

Also consumer confidence should go up as investors see more strength in the credibility of the U.S. government.

Reuters Messaging rm://[e-mail]

1127 ET 02May2011
Ziopharm call spreads turn busy before presentation

Ziopharm Oncology Inc shares hit a new year high at $7.84 on Monday morning then pared gains to $7.70 ahead of a presentation at a Deutsche Bank Securities health conference on Wednesday. In the options, a complex call spread was transacted, optionMONSTER analyst Chris McKhann said on the firm's website. Most of the 4,700 Ziopharm options that traded Monday morning were in one calendar spread.

OptionMONSTER said the trade involved 2,076 each of the July $8 and October $8 calls at 60 cents and 85 cents respectively. Given the trade prices and price action, the July calls were bought and the October were sold in a short calendar spread, he said, in what appears to be a new position. This type of spread can profit if shares move sharply up or down or if the implied volatility of the options comes in line, he said.

The implied volatility of the July options is 15 percent less than that of October contracts. The real risk is the time decay of the nearer-term option. Meanwhile, one investor paid 65 cents for the July $7-$8 call spread, which traded 1,150 times. It might be a roll of a position up in strike prices, said WhatsTrading.com options strategist Frederic Ruffy.

Reuters Messaging: [e-mail]

1048 ET 02May2011-Freeport
McMoRan weekly call options heat up

Mining company Freeport-McMoRan Copper & Gold Inc rose 29 cents to $55.32 early Monday. The stock's options order flow seemed somewhat bullish, however, after about 49,000 calls and 19,000 puts traded during the first 66 minutes of the session, according to Trade Alert. The top trade is a 347-lot of weekly $57.5 calls at 23 cents per contract, said WhatsTrading.com options strategist Frederic Ruffy. The strike's volume has expanded to 11,730 contracts.

The weekly $55, May $55, and May $57.5 calls are busy as well, he said. There was no apparent news on the stock. Freeport posted a higher-than-expected first-quarter profit when the company last reported on April 20. For details, see.

Shares rallied on the news and are up 5 percent since that time, Ruffy said. 'Freeport-McMoRan is always a copper name that grabs the attention of all that follow the global growth potential,' said optionMONSTER co-founder Pete Najarian on the firm's website. OptionMONSTER data showed buyers snapping up FCX May $57.5 weekly calls, trading in the largest blocks of 31 cents and even some stretching up for the $60 calls in the weekly's.

Reuters Messaging: [e-mail]

1009 ET 02May2011
MKM recommends June calls on Technology ETF

Two-month implied volatility in the Technology Select Sector SPDR fund is at 2007 levels, and MKM is recommending that investors buy outright June calls in the fund that closed at $26.75 on Friday. Its shares rose four cents to $26.79 on Monday.

'Technology hardware & equipment looks particularly attractive to us given its recent underperformance relative to historical reflationary periods,' MKM said in a report. The exchange-traded fund is 40 percent comprised of its five largest constituents, Apple Inc, IBM, Microsoft, AT&T and Oracle, all of which have already reported quarterly earnings. MKM recommends June $27 XLK strike calls outright for $0.45 to position for the ETF to follow the broader market higher and break through its February top around $27.

Reuters Messaging: [e-mail] Keywords: MARKETS STOCKSNEWS/

COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.