Nightly Business Report
After the close, the company came out with third quarter earnings, $0.55, down from $0.91 and in after hours trading, the stock fell nearly $1 from that ...
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We have already covered in depth how the European Union may have thrown in another roadblock on the Oracle Corp. (NASDAQ: ORCL) acquisition of Sun Microsystems Inc. (NASDAQ: JAVA). This has caused over 1.04 million shares to trade hands in JAVA stock as of 5:18 PM EST. The stock closed at $8.35 today, and the stock is still down 2.6% at $8.13. At one point after the news broke we had as much as an 8% drop.
Human Genome Sciences Inc. (NASDAQ: HGSI) was lower this morning and had been off our radar as a result after yesterday’s huge moves. Yet at 1:30 PM EST we have just hit the virtual double on average daily volume. Shares are up 8% at $27.34 on about 16.2 million shares versus and average volume of over 8 million shares. This one traded 13 million shares on each last Thursday and Friday ahead of the event, but yesterday’s volume was a whopping 41+ million shares for a 35% gain. We have also seen over 60,000 CALLS trade for NOV-2009 alone, which is 6 million shares on a fully leveraged basis. This is a fraction of yesterday’s volume but this yet another 52-week high today. Shares are at $27.48 and the intra-day high was $27.52. Yesterday’s high was a 52-week high as well, and that was at $26.21. For reference, that is a high back to early 2002.
JON C. OGG
Wells Fargo & Company (NYSE: WFC) has seen a flurry of PUT OPTIONS activity today. It has traded about 123,000 puts and 17,589 calls as of 11:20am, with put volume nearly 3X average daily volume already. Of this volume more than 75% of it has been bought at the offer, bearish bets. The majority of the volume is due to large ratio put spreads in January, as the $26/$21 ratio put spread is being bought, 31,000 $26 puts against 62,000 $21 puts. The action comes a day after large bearish bets were being made in June for the Financials (XLF), of which Wells Fargo is a large component. The main worry with Wells Fargo is that it will need to raise capital in the near future as it is attempting to rely on earnings to repay the TARP. The Company will be presenting this Friday in Boston at 10am at the Bank Analysts Association. The ratio put spread is also a bet against volatility, although Wells has traded in a very tight range for months and is already less volat ile than its counterparts.
-JOE KUNKLE, OptionsHawk.com
We have already covered the news that Berkshire Hathaway Inc. (NYSE: BRK-A) is acquiring Burlington Northern Santa Fe Corporation (NYSE: BNI). But this news has many of the other railroad stocks popping early on the news. At 8:12 AM EST we have CSX Corp. (NYSE: CSX) up 8% at $46.30 on over 200,000 shares. Norfolk Southern Corp. (NYSE: NSC) is up almost 7% at $49.85 on about 68,000 shares. Kansas City Southern (NYSE: KSU) is up 11% at $26.75,but on little volume. Buffett also owns a stake of Union Pacific Corp. (NYSE: UNP), which is up over 6% at $58.71. We’d expect that Buffett will sell that Union Pacific stake and you can likely forget about Buffett buying another rail player because of antitrust issues that could come into play. This acquisition does et the valuation bar higher for the sector, but it would tale other players to buy these besides Buffett. -JON OGG