Midday Options Update: Intel, Toys R Us, Urban Outfitters, Dillard's, and Delta Air Lines

Strategic Insights -

The US stock market continues to struggle, trading slightly above the break-even mark, as investors wait for economic news. The Labor Department reported a surge in initial jobless claims, while the Commerce Department noted a rise in wholesalers' inventories, but a modest increase in sales. Intel's upcoming mid-quarter update has traders flocking to the stock's calls, and the March 25 call has traded over 21,200 contracts. Meanwhile, Toys R Us' potential acquisition by Cerberus Capital Management has sparked interest, and several retailers, including Urban Outfitters and Dillard's, have reported quarterly earnings.

Key Takeaways:

  • The US stock market faces headwinds from economic news, with initial jobless claims rising 17,000 to 327,000.
  • Intel's upcoming mid-quarter update has traders buying calls, with the March 25 call trading over 21,200 contracts.
  • Cerberus Capital Management's bid to acquire Toys R Us for approximately $5 billion has sent shockwaves through the retail sector.
  • Several retailers, including Urban Outfitters, Dillard's, and Children's Place, have reported better-than-expected quarterly earnings.
  • Delta Air Lines has plunged 10% after announcing a substantial loss in 2005 due to higher fuel prices and interest expenses.
  • The Energy Select Sector SPDR Fund has seen a significant increase in put trading, with over 13,300 contracts traded on the March 42 put.

Statistics:

  • Initial jobless claims rose 17,000 to 327,000 for the week of March 4.
  • Continuing claims increased by 39,000 to 2.70 million for the week of February 26.
  • The four-week moving average increased by 5,750 to 312,500.
  • Inventories of U.S. wholesalers rose 1.1% in January, led by stockpiling of farm products, groceries, clothing, and cars.
  • Sales at wholesalers inched just 0.5% higher, the smallest increase since June.

Sources:

  • "Schaeffer's Midday Options Update" (www.SchaeffersResearch.com)
  • "Alteration (ALTR) announcement" (unspecified source, mentioned in the article)
  • "Intel (NASDAQ:INTC) mid-quarter update"
  • "Toys R Us (NYSE:TOY) announcement"
  • "Urban Outfitters (NASDAQ:URBN) quarterly earnings report"
  • "Dillard's (NYSE:DDS) quarterly earnings report"
  • "Delta Air Lines (NYSE:DAL) announcement"
  • "Energy Select Sector SPDR Fund (XLE) data"
  • "Labor Department report"
  • "Commerce Department report"