Wal-Mart Stores Inc. Reports Strong Same-Store Sales

Business Wire, June 5, 2008

OptionsNews on ONN.tv for June 5, 2008

CHICAGO -- OptionsNews, the daily news program on www.onn.tv, today reported on the following companies:

Wednesday's option volume for indexes and single stocks registered nearly 12 million contracts, lower than the year to date average of 14 million contracts, and slightly lower than Tuesday's volume of over 12 1/2 million contracts. The CBOE volatility index, also known as the VIX, ended the day at 20.80, up nearly 3% from Tuesday's close of 20.24.

Retailers are set to report same-store sales for May today, and most analysts expect a modest rise of 1.2%. Most of these gains will reportedly come from discount and big-box stores such as Wal-Mart Stores Inc. (WMT) due to shoppers on tight budgets, while department stores and apparel retailers are likely to post declining sales. Wal-Mart, which closed yesterday at $58.68, reported a 4.4% gain in same-store sales, or 3.9% excluding the effect of fuel prices. Limited Brands Inc. (LTD), which closed yesterday at $18.93, saw their same-store sales fall 6 percent. The Wal-Mart June 57 1/2 closed at $2.11, giving us a range of $55.39 to $59.61. The Limited Brands June 20 straddle closed at $1.58, giving us a range of $18.42 and $21.58.

As we have reported many times, one of the biggest industries to feel the bite of high oil prices has been the airlines. Today, Continental Airlines (CAL) announced that they will be cutting 3000 jobs and reducing their flight capacity in the 4th quarter by 11%. Continental stated that record high fuel costs and an industry "in crisis" were the factors behind these moves. Additionally, the company stated that their chief executive and president say they will not take a salary for the remainder of the year and will not accept any bonuses. Retail options traders may want to take a look at the skew in airline stocks such as Continental. Traders are obviously concerned about bankruptcies in this sector, and have been hedging themselves by buying puts.

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