Schaeffer's Midday Options Update Features Oracle, Retek, Continental Airlines, Citigroup, and Onyx Pharmaceuticals

Business Wire, March 18, 2005

CINCINNATI -- Today's Schaeffer's Midday Options Update Oracle (NASDAQ:ORCL), Retek (NASDAQ:RETK), Continental Airlines (NYSE:CAL), Citigroup (NYSE:C), and Onyx Pharmaceuticals (NASDAQ:ONXX). The Midday Options Update contains a brief commentary on the day's most notable activity and a table listing the most-active calls and puts for the day.

The Midday Options Update is published every day at www.SchaeffersResearch.com - the home of Bernie Schaeffer and Schaeffer's Investment Research. 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=PROB1M&PAGE=1.

A daily feature available on SchaeffersResearch.com is "Options Update." Every day, we'll give a brief recap of some of the hottest news topics and focus on one stock that is the center of some heavy option activity. We hope that this will effectively offer stock information, particularly on equities that are currently popular among those in the investing community.

The market is trading lower this afternoon following a round of less-than-reassuring economic news. During February, import prices rose 0.8 percent, versus the Street's estimate for a 0.7-percent increase. Excluding the 3.9-percent spike in oil prices, import prices inched 0.2 percent higher. During the past 12 months, import prices had increased to a tune of 6.1 percent, including a 29.6-percent jump in petroleum prices. Excluding oil, prices are up 2.9 percent over a 12-month period. Meanwhile, export prices were unchanged in February and are up 3.4 percent for the past year.

Consumer sentiment soured slightly in March. The University of Michigan's Consumer Sentiment Index tumbled to 92.9 in early March from February's final reading of 94.1. Not only did March's reading hit the lowest level since November, but it also came in below the Street forecast of 94.6. The current conditions index tumbled to 107.3 in March from 109.2, while the expectations index slipped to 83.6 from 84.4.

Chip Shot

The PHLX Semiconductor Index is down more than one percent after the release of some weak data. Trade group SEMI announced that the semiconductor equity industry stated that prelim book-to-bill ratio fell to 0.78 in February. Bookings came in at $1.03 billion, four percent above December's level and 22 percent below year-ago levels of $1.32 billion. The book-to-bill ratio was 0.78, down from 0.8 in January. The figure means $78 worth of orders were received for every $100 of product billed. This reading is a key measure of demand for the group.

Stalking Retek

In corporate news, Oracle (NASDAQ:ORCL) raised its cash tender offer for Retek (NASDAQ:RETK) to $11.25 per share, valuing the deal at $631.4 million. ORCL already announced that it holds approximately 10 percent of the outstanding shares. This report comes after SAP (SAP) raised its bid early Thursday to $11 per share from its previous deal of $8.50 per share. Analysts expect SAP to walk away from the deal.

Another Airline Stumbles

Continental Airlines (NYSE:CAL) joined the growing list of airlines to issue warnings. The firm stated that is expects to run a "significant" loss in 2005 and projects red ink for the first quarter as well. The firm also said it expects to end the March quarter with a balance of unrestricted cash and short-term investments ranging between $1.3 billion and $1.4 billion. According to MarketWatch, CAL doesn't currently have any fuel hedges and said that domestic bookings through the end of March have been "strong" but that transatlantic bookings are "about flat with last year."

A Warning Shot

Banking stocks will be under the microscope today, thanks to the Federal Reserve "calling out" Citigroup (NYSE:C), telling the firm that it needs to "clean up" its regulatory compliance. The Federal Reserve hinted that it may not approve further attempts from C to make large banking acquisitions. The Fed presented C with a 22-page (some light reading) decision that approved the purchase of First American Bank. C is not completely foreign to scandal over the past few years. Recently, the banking business had to pay more than any other firm in the $1.3 billion settlement concerning Wall Street's dicey stock research practices. The company's bond traders in Europe are being scrutinized for unclear activity in the debt market. The Fed's move is mildly surprising, since it tends to lurk behind the scenes and avoids sticking its nose into major disputes.

Most-Active Options Update

At 1:11 p.m. eastern time, the Dow Jones Industrial Average (DJIA - 10,554.2) was down 0.40 percent while the S&P 500 Index (SPX - 1,185.10) has dropped 0.43 percent higher. The Nasdaq Composite (COMP - 2,004.5) is lower by 0.59 percent. At 1:12 p.m. in the options pits, 1,824,255 calls and 1,709,579 puts traded for a composite put/call ratio across all six exchanges of 0.93. The CBOE put/call volume ratio for equity options weighed in at 1.07.

Onyx Pharmaceuticals