Schaeffer's Daily Market Blog Features Krispy Kreme Doughnuts, Amazon.com, Delta Air Lines, Burlington Resources, and PHAZAR

Business Wire, Jan 5, 2005

CINCINNATI -- Among the stocks featured in the January 5 edition of Schaeffer's Market Blog are Krispy Kreme Doughnuts (NYSE:KKD), Amazon.com (NASDAQ:AMZN), Delta Air Lines (NYSE:DAL), Burlington Resources (NYSE:BR), and PHAZAR (NASDAQ:ANTP). Schaeffer's Market Blog are just one of the many free market commentaries written everyday at www.SchaeffersResearch.com - the home of Bernie Schaeffer and Schaeffer's Investment Research. The Market Blog is written throughout every trading day by Schaeffer's financial analysts and traders. They are quick insights to the day's most notable market activity from an options perspective. For additional information about this report or to have it delivered to you free via email every day click on the following link: http://www.schaeffersresearch.com/redirect.aspx?CODE=PRMOU1M&PAGE=1

Schaeffer's Market Blog for Wednesday, January 5, 2005:

Below are just a few of today's Market Blog entries. Click here to read all of today's Market Blog: http://www.schaeffersresearch.com/redirect.aspx?CODE=PROB1C&PAGE=1

9:52 AM Puts on Krispy Kreme Doughnuts Active after Company Announces 2004 Financial Restatement

In a press release yesterday morning, Krispy Kreme Doughnuts (NYSE:KKD) announced that it would have to restate its earnings for fiscal 2004 due to accounting errors. There had been speculation of a possible restatement since the company issued a profit warning in May and later announced the company was under investigation by the SEC. KKD shares dropped almost 15 percent yesterday, closing at 10.48. Puts on KKD traded at a pace 4.7 times greater than the stock's average put volume. Total put volume was at 17,071 with the January 10 strike being the most active with volume of 5,515.

10:37 AM Despite Downgrade and Drop in Stock Price, Amazon.com Calls Active

Amazon.com (NASDAQ:AMZN) declined more than five percent yesterday after being downgraded to a "sell" rating by Smith Barney. Despite this analyst move and the stock drop, calls dominated option activity. A total of 41,694 calls traded, which is 2.7 times greater than the average daily call volume. The most active option was the January 45 strike with volume of 12,801. The security's Schaeffer's put/call open interest ratio (SOIR) dropped from 1.13 to 1.03 and the percentile ranking dropped from 67 percent to 48 percent.

10:56 AM Delta Air Lines Cuts Domestic Airfares

Delta Air Lines (NYSE:DAL) announced this morning that it will be cutting domestic airfares by as much as 50 percent. According to an article in the New York Times, the new fare system will cap economy-class fares at $499 each way. Furthermore, the plan will also eliminate the mandatory Saturday night stay. This program is the most radical fare adjustment since American Airlines made a similar adjustment in 1992. The New York Times article cited concerns from other airlines and financial analysts in response to the fare cuts. In fact, a Northwest Airlines (NWAC) representative said this program could "immediately adversely and significantly affect" revenue in the airline industry, which has lost $30 billion since 2000. Adding more pressure to the airline industry, brokerage house Merrill Lynch downgraded shares of DAL, AMR (AMR), NWAC, and AirTran (AAI) this morning. At last check, DAL was trading 50 cents lower to $6.81 while the Amex Airline Index (XAL) was down more than 2.5 percent to 53.62.

11:41 AM Calls Trade Actively on Burlington Resources

According to Yahoo! Finance, Burlington Resources (NYSE:BR) is engaged in the exploration, development, production, and marketing of natural gas, crude oil, and natural gas liquids. Yesterday, call options traded actively on BR, as call volume was 4.6 times heavier than average. More than 5,700 contracts crossed the tape, with the most active being the February 40 strike (BR BH). Investors traded more than 2,500 BR BH contracts yesterday. This activity caused BR's Schaeffer's put/call open interest ratio (SOIR) to decline 0.12, or 13 percent, to 0.83. This SOIR is lower than 92 percent of all readings taken over the past year. Low SOIRs indicate optimism from options players, as they hold relatively more bullish calls compared to bearish puts in near-term activity. BR has pulled off its November highs and is now trading below its 20-week moving average. Today, BR is trading 37 cents lower to $40.50.

1:31 PM PHAZAR Falls on Order Backlog Decline

According to Hoover's, PHAZAR (NASDAQ:ANTP) is a holding company that operates through its Antenna Products, Phazar Antenna, and Thirco subsidiaries. PHAZAR manufactures fixed and mobile antennas for such wireless Internet, LAN, GPS, cellular, and Bluetooth networks. The company's products include cellular, shipboard, surveillance, and tactical antennas and towers primarily sold in the U.S. PHAZAR's customers include commercial equipment makers as well as agencies and contractors of the US government. The stock is down more than 16 percent after the company released second-quarter earnings yesterday evening. Although it reported a profit of 22 cents per share, 69 percent higher than the same quarter last year, ANTP said its order backlog had dropped by 50 percent compared to last year. The stock has gone straight up since mid-November, gaining more than 800 percent.