Schaeffer's Daily Market Blog Features: U.S. Airways Group, Best Buy, Circuit City Stores, Advanced Micro Devices, Nucor

The Delta Air Lines (DALRQ) drama continues. Yesterday, I reported in an article that the airline planned to reorganize under bankruptcy in the hopes of lifting its value above the acquisition offer made by U.S. Airways Group (NYSE:LCC) on November 15.

Today, DALRQ took a step closer to exiting bankruptcy with a reorganization filing that valued its business at $9.4 billion to $12 billion, versus the $8.4-billion merger offer from LCC, which it formally rejected as a suitor. DALRQ hopes to chart its own path out of Chapter 11 reorganization, under which creditors would be paid about 63 percent to 80 percent of their allowed claims. The company expects a return to profitability in 2007, with earnings of $500 million seen for the year.

In early trading this morning, the shares of DALRQ have plunged 13.6 percent to $1.27, while LCC is down only 1.76 percent at $54.82. The AMEX Airlines Index (XAL) has retreated only 0.76 percent.

11:29 AM Best Buy, Circuit City Feel No Holiday Joy

The last week of shopping before Christmas is not going well for home electronics retailers. Best Buy (NYSE:BBY) has dropped almost three percent, at last check, to $48 per share. This fall has come as the result of the weak third-quarter earnings reported last week. BBY's holiday blues are nothing, however, compared with the funk Circuit City Stores (NYSE:CC) is currently in. This morning has seen an 18-percent drop off for the retailing giant. Today's $18.25 per share is the lowest level the stock has hit since November 2005. The reasons for this are similar to that of BBY's downswing: CC reported a loss of $16 million, or nine cents per share, versus year-ago income of $10.1 million, or six cents per share.

As demand for new electronics such as flat-panel televisions has gone up, and competition from the likes of Wal-Mart Stores (WMT) and Home Depot (HD) has likewise increased, retailers who previously held a somewhat comfortable corner on the market have had to cut prices and forego a portion of their expected profits. CC's gross margin (the difference between sales and cost of goods sold) fell more than 1.9 percent relative to revenue.

12:27 PM Nucor Opens Lower, Rallies

Steel concern Nucor (NYSE:NUE) gapped lower today by three percent, but quickly rallied into positive territory. The shares approached the put-heavy 55 strike, and found support. The 55 level is also the site of the stock's 80-day moving average. Looking at a weekly chart, this could be a good entry point from the long side to play the potential for a continuation in the equity's longer-term upward trend.

1:08 PM Rush of Call Options Trading on AMD

Advanced Micro Devices (NYSE:AMD) is trading near its lows of the day despite heavy call option volume. In fact, call volume on the stock is more than 15 times respective put volume, and there have been nearly 30,000 contracts of volume at the well out-of-the-money AMD January 2007 25 call. Such a rush of optimism amid rather lackluster price performance could suggest further weakness.