STOCKS NEWS US-Union Pacific shares rise, options swell

Stocks on the move Real-time Equity news U.S. stock market report 1321 ET 03Nov2009 Union Pacific shrs, options surge after Berkshire-BNI offer ------------------------------------------------------------------------------ Union Pacific Corp shares rallied and its option volume surged after Warren Buffett's Berkshire Hathaway agreed to buy Burlington Northern in a deal that values the railroad company at $34 billion. UNP shares rose 6.76 percent to $58.78. Option activity was three times the average daily turnover with about 20,000 calls and 12,000 puts traded, according to Trade Alert. One top trade was a January 2010 $50-$70 risk reversal which appeared to be sold, 4,000 times. The investor collected 60 cents for the puts sold and the positions were tied to shares at $58.05, said WhatsTrading.com option strategist Frederic Ruffy. Speculation from the floor is that the risk reversal may be a closing trade based the current open interest in those respective strikes and the profit realized, said Joe Kinahan, chief derivatives strategist at TD Ameritrade. Meanwhile, the Nov $55 and $60 UNP calls were active with some buy-write sellers taking advantage of today's strength to collect premium, Ruffy added. Reuters Messaging: [e-mail] 1213 ET 03Nov2009-US STOCKS-Wall St pulled lower by semis, financials ------------------------------------------------------------------------------ U.S. stocks stumbled on Tuesday after Morgan Stanley downgraded the semiconductor sector and a shake-up at two big British banks prompted investors to sell financial shares. For more please double click Reuters Messaging: [e-mail] 1146 ET 03Nov2009-Semi index may be nearing support level: analysts ------------------------------------------------------------------------------ A Morgan Stanley downgrade of the semiconductor sector pushed the semi index into negative territory on Tuesday, and some analysts speculated that the index could be nearing a key technical support level around 280. The index fell 2.4 percent to 291 on Tuesday, and is down about 14 percent from a 2009 high reached in mid-October. "The early October low in the semi index is the support area that counts. Taking that out would be significant," said Frank Gretz, market technician for Shields & Co in New York. "There's been so much damage here that we could make a low and then drift for the rest of the year. I'm not optimistic that we'll get higher highs." Morgan Stanley downgraded the industry, citing rising inventory levels. For details, see Reuters Messaging: [e-mail] 1102 ET 03Nov2009-DuPont sees U.S. recovery taking hold ------------------------------------------------------------------------------ DuPont Co on Tuesday said an economic recovery was beginning to take hold in the United States, and forecast 2010 profit growth in line with Wall Street estimates. The chemicals maker said it was "well-positioned to outperform the rate at which the markets recover and improve" and forecast 2010 sales above the Wall Street consensus. For details, see Shares of the Dow component rose 1 percent to $32.59. Reuters Messaging: [e-mail] 1050 ET 03Nov2009-Life Tech strangle suggests rangebound move ------------------------------------------------------------------------------ Shares of life sciences toolmaker Life Technologies Corp edged down 3 cents to $47.55 in morning trade. Its option volume was six times the average daily turnover after a so-called strangle sale was initiated, said independent options trader Steve Smith. An investor sells a strangle which entails a call and a put with the same expiration date and different but both out-of-the-money strikes, expecting no significant move in the underlying stock. Smith noted the December $45/$50 strangle traded 4,900 times on each side of the trade in an opening sale for a $2.50 net credit. The stock has enjoyed a steady climb for the past 10 months gaining some 110 percent from the start of the year. Selling the strangle would be a bet that shares would be between $45 and $50 over the next month, Smith said. Reuters Messaging: [e-mail] 1043 ET 03Nov2009-Cablevision shares up after earnings beat ------------------------------------------------------------------------------ Shares in New York operator cable Cablevision Systems Corp rose 3.7 percent to $24.13 after the company posted better-than-expected quarterly profit, fueled by increases in Internet and phone subscribers and advertising revenue. The company said its profit rose to $98.9 million, or 33 cents a share. Last year it earned $30.9 million, or 11 cents per share. For more on this story see Reuters Messaging: [e-mail] 1032 ET 03Nov2009-Factory orders up 0.9 pct in September ------------------------------------------------------------------------------ New orders received by U.S. factories rose a stronger-than-expected 0.9 percent in September, while inventories continued to shrink, the Commerce Department said on Tuesday in a report suggesting manufacturing activity is feeding the economic recovery. It was the fifth month out of six that orders rose, the department said. They dropped an unrevised 0.8 percent in August. Analysts polled by Reuters had expected orders to increase 0.8 percent. For details, see Reuters Messaging: [e-mail] Keywords: MARKETS STOCKSNEWS COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved.

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