End of Day Update 2 Feb. 2nd 2011

NYSE down 17.52 (-0.2%) to 8,272.57
DJIA up 1.81 (+0.02%) to 12,042
S&P 500 down 3.56 (-0.3%) to 1,304
Nasdaq down 1.03 (-0.04%) to 2,750

GLOBAL SENTIMENT

Hang Seng up 1.8%
Nikkei up 1.78%
FTSE up 0.71%

UPSIDE MOVERS

MTXX gets increased buyout offer.
ERTS continues evening reation to earnings beat.
NAVI sold to Time Warner Cable.
APKT continues evening gain that followed upbeat guidance.
MCZ inks deal with MSFT.
MGIC jumps on improved earnings vs year-ago quarter.
WFR continues upside evening reaction to latest earnings.
MAT gains after earnings.
HSY gains after earnings.

DOWNSIDE MOVERS

WMT downgraded.
BRCM beats with revenue but guidance straddles Street view.
BGP selling pressure continues amid bankruptcy speculation.
LVLT beats with Q4 results.
CHTP to modify Study 306 to Focus on Reduction in Falls Associated With
Neurogenic Orthostatic Hypotension.
ANN give up early gains; issues upbeat guidance.
WHR declines after earnings.

MARKET

The blue-chip Dow Jones Industrial Average closed above 12,000 on Tuesday
for the first time in 2 1/2 years and its narrowly firmer finish today is
its third straight day for an advance.

Mattel (MAT) and Hersey (HSY) both gained after their latest earnings
reports. Whirlpool (WHR)earnings missed but revenue beat. Electronic Arts
(ERTS) beating with results. MEMC Electronic Materials (WFR) swinging to
a profit.

Wall Street had one economic report to chew over Wednesday but its
immediate impact was limited. The economy added 187,000 private-sector
jobs in January, the 12th consecutive month of private-sector employment
growth, according to Automatic Data Processing. But ADP lowered its
December figure to 247,000 new jobs from a previous estimate of 297,000.
The report is a curtain-raiser for Friday's closely tracked Labor
Department jobs report.

Bullish Flow

The biggest options trades across the market today were in Citigroup (C). Shares lost a nickel to $4.95 and large blocks of June calls traded on the bank. In this spread, the strategist bought a block of 123,000 June 5.5 calls at 16 cents and sold a block of 123,000 June 6 calls at 7 cents each. If opening (it might be closing or rolling trade), this spread is an aggressive play on Citigroup. The strategist is paying a net debit of 9 cents (plus transaction costs) and faces an upside breakeven of $5.59 at the June expiration, or 12.9 percent over the next 125 days. The potential pay-off is $1.41 per spread if the stock rallies to $6 or more, which is a move of 21.2 percent. The nine-cent debit is at risk if the position is held and shares fail to move beyond $5.5 through the June expiration.

Bullish trading was also seen in Eagle Bulk Shipping (EGLE), JA Solar (JASO), and Genco Shipping (GNK).

Bearish Flow

United Therapeutics (UTHR) hit a high of $69.48 early Wednesday, but spent the remainder of the trading session moving lower and finished the day down $2.05 to $66.94. One strategist showed good timing in morning action and apparently bought the August 60 – 50 put spread in UTHR at $3.80, 1000X. They bought 1,000 August 60 puts at $6.80 each and sold 1,000 August 50 puts at $3.00. The spread traded when the stock was still trading north of $68. It was repeated multiple times until volume in both contracts reached 2,100 and appears to reflect expectations for additional losses in UTHR from now through mid-August.

Bearish flow also surfaced in Costco (COST), Genworth (GNW), and Kellogg (K).

Index Trading

Trading in the index market was very light, as the index pits in Chicago saw skeleton crews due to the massive winter storm that pummeled the Windy City yesterday and today. 271,000 calls and 390,000 puts traded across the S&P 500 Index (.SPX) and other index products, which is only 56 percent the recent average daily levels, according to Trade Alert data. Meanwhile, the CBOE Volatility Index (.VIX) lost .33 to 17.30, amid a day of light volume and low volatility in the equity market Wednesday.

 

ETF Trading

CurrencyShares Japanese Trust (FXY) lost 28 cents to $121.19 after the dollar moved to 81.54 from 81.34 against the Japanese yen. FXY is an exchange-traded fund that tracks the inverse of the currency pair X 100 and is up 3.3 percent since mid-December. Meanwhile, in options action, a noteworthy trade in FXY was a block of 7,500 January 110 put at $2.05 on the ISE. It was an opening buyer, according to data from the exchange. May 128 puts, March 119, and even January 95 puts saw interest as well, as some investors appeared to be buying downside puts and bracing for additional weakness in the yen during the months ahead. This might be a play on Bank of Japan intervention. The bank intervened a few months ago to slow the appreciation of the rising yen.

 

Major Corporate & Economic Events, Feb 3 to Feb 4

THURSDAY, Feb. 3

Extended-Hours Earnings: ABMD, AATI, ALEX, ALKS, ATK, AMB, AFG, AINV,
ABFS, ARTX, AN, AVNR, AWRE, BEAV, BEBE, BDC, BBBB, BRKS, CALX, CALD, CPT,
CAH, CBG, CME, CI, CDXS, CSTR, CNMD, CTCT, CVS, CYS, DWCH, DB, DO, RDEN,
EMKR, FISV, GSK, GR, HAIN, HAR, HLIT, HI, IN, IP, IVC, ITG, ITT, XXIA,
JDSU, K, KEM, LB, LTRX, LVS, LIFE, LPTH, LQDT, MHO, HZO, MA, MMS, MXL,
MDU, MRK, MF, MTX, MSW, MPWR, MCO, MOSY, MTSC, MFLX, LABL, MGAM, NOV,
EGOV, OCLS, ONNN, OPWV, OPXT, PTEN, PENN, PKI, PLNR, POL, POWI, PWER,
QSFT, RDWR, RAI, RSTI, RTIX, R, SIMG, SNA, STLY, HOT, SRCL, SUN, TSYS,
BX, DOW, EL, NYT, TM, TZOO, TRMB, GROW, UL, UTI, VRTX, VIA, WHG, YDNT,
ZRAN.

Economic Data: 8:30 a.m. Initial Claims; 10 a.m. Factory Orders; ISM
Services.

FRIDAY, Feb. 4

Extended-Hours Earnings: ACET, AET, ABC, AON, AIV, AVID, CLX, FO, MGI,
CHUX, BPOP, PHM, SIRO, SRI, TSN, WY, YRCW.

Economic Data: 8:30 a.m. Unemployment Data.

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