Midday Options Update: Apple, Intel, and Campbell Soup in the Spotlight

Strategic Insights -

The Midday Options Update features key market activity, earnings reports, and notable trades. Today, Apple Computer (AAPL) is in focus due to a potential partnership with Intel (INTC), while Campbell Soup (CPB) reports a surprise earnings beat. Meanwhile, the software sector receives a boost from Goldman Sachs, and Harmony Gold Mining (HMY) faces a setback in its bid for Gold Fields.

Key Takeaways:

  • Apple Computer (AAPL) is pondering using Intel (INTC) chips in its Macintosh computer line, with two industry execs stating that a deal is likely.
  • Campbell Soup (CPB) reports third-quarter earnings of $146 million, or 35 cents per share, beating the Street estimate of 33 cents per share.
  • Goldman Sachs lifts its rating on the software sector from "neutral" to "attractive," citing growth potential and year-end rally expectations.
  • Abbott Laboratories (ABT) obtains a temporary restraining order against Teva Pharmaceutical Industries (TEVA) to block a generic version of an antibiotic.
  • Harmony Gold Mining (HMY) faces a setback in its bid for Gold Fields, with the High Court of South Africa ruling that HMY's hostile bid lapsed on December 18, 2004.
  • IBM (IBM) has been a longtime chip supplier for AAPL and may be impacted by the potential partnership with INTC.
  • The software sector is expected to grow with the emergence of web-services architecture, accelerating industry growth.
  • Short interest in HMY rose 26 percent in May to 5.8 million shares, while the stock has a Schaeffer's Equity Scorecard ranking of 4.0 out of 10.

Statistics:

  • The Dow Jones Industrial Average (DJIA) was up 0.36 percent at 10,526.29.
  • The S&P 500 Index (SPX) had added 0.22 percent to 1,191.93.
  • The Nasdaq Composite (COMP) inched 0.32 percent to 2,053.1.
  • At 1:57 p.m., 2,087,958 calls and 1,456,402 puts had changed hands, for a composite put/call ratio of 0.69.
  • The CBOE put/call volume ratio for equity options stood at 0.62.
  • Campbell Soup (CPB) sales came in at $1.74 billion, missing the consensus forecast for $1.76 billion.

Sources:

  • Schaeffer's Midday Options Update
  • The Wall Street Journal
  • MarketWatch
  • Schaeffer's Investment Research (www.SchaeffersResearch.com)
  • Forbes
  • Barron's