Schaeffer's Midday Options Update Features ChevronTexaco, Gilead Sciences, KLA-Tencor, Intel,...

CINCINNATI -- Today's Schaeffer's Midday Options Update Features ChevronTexaco (NYSE:CVX), Gilead Sciences (Nasdaq:GILD), KLA-Tencor (Nasdaq:KLAC), Intel (Nasdaq:INTC), and General Electric (NYSE:GE). 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

Schaeffer's Midday Options Update: Puts Active on General Electric

The major market indexes are hovering close to the break-even mark this afternoon, as investors seem hesitant to jump back into the market following some less-than-stunning economic news. For the second quarter, the Gross Domestic Product grew by 3.0 percent compared to June revised reading of 4.5 percent and the Street estimate for a 3.6-percent increase. On the plus side, the Chicago Purchasing Managers' Index rose to 64.7 percent from June's 56.4 percent. This index measures manufacturing activity in and around the Chicago area. Meanwhile, investors remain optimistic about the economy. The University of Michigan final consumer sentiment index for July inched higher to 96.7 from the preliminary reading at 96.1 and June's report of 95.6.

Oil concerns are weighing on the shoulders of investors as well. Debt woes at Russia's Yukos, terrorist attacks, storms in the key oil and natural-gas producing region in the Gulf of Mexico, and an oil-workers strike in Norway have traders concerned over output levels. As a result, the price of crude oil for September delivery spiked to a new record at $43.60 a barrel. The contact has since backtracked slightly and is now trading higher by 1.59 percent at $43.43.

Turning to the latest earnings news, ChevronTexaco (NYSE:CVX) posted second-quarter earnings of $4.1 billion, or $3.88 per share, compared to its year-ago profit of $1.50 per share. Analysts had forecast a profit of $2.72 per share. Revenue for the quarter rose 26 percent to $36.62 billion. This positive news has allowed the shares to shoot higher to a new 52-week peak.

Gilead Sciences (Nasdaq:GILD) has also shot more than 10 percent higher on its positive earnings report. The firm raked in $111.5 million, or 49 cents per share, for the second quarter, besting the Street estimate of 35 cents per share. Revenue for the previous quarter jumped by 34 percent to $319.7 million.

KLA-Tencor (Nasdaq:KLAC) is also trading higher after posting a fourth-quarter profit of 48 cents per shares, matching the Street forecast. However, revenue for the period came in just shy of the consensus estimate at $450 million. Analysts had been looking for sales of $451.96 million.

In other news around the Street, Janus Capital Group reported that a client plans to pull out approximately $5 billion from its funds. The group declined to comment on the source of the funds. As a result of the news, the shares are down roughly five percent to hit a new 52-week low. On the other hand, Intel (Nasdaq:INTC) has rebounded since announcing that it is delaying the introduction of its four gigahertz Pentium 4 processor until the first quarter of 2005.

At 2:18 p.m. eastern time, the Dow Jones Industrial Average (DJIA - 10098.3) is down 0.30 percent and the S&P 500 Index (SPX - 1098.54 is lower by 0.17 percent. The Nasdaq Composite (COMP - 1888.2) is up 0.38 percent. At 2:20 p.m. in the options pits, 1,426,880 calls and 858,576 puts traded for a composite put/call ratio across all five exchanges of 0.60. The CBOE put/call ratio for equity options weighed in at 0.54.

General Electric (NYSE:GE) is seeing some heavy put trading this afternoon at its September 32.50 strike. More than 6,200 contracts have changed hands on this back-month option. However, with open interest already numbering more than 46,500 contracts, we shall have to wait until Monday to see if this surge in volume translates into new positions. Overall, options players have grown relatively complacent toward the large-cap stock. The equity's Schaeffer's put/call open interest ratio checks in at 0.75 and is in the middle of all those taken over the past 52 weeks. Meanwhile, short sellers are avoiding this stock. Over the most recent reporting period, the number of GE shares sold short plunged by 24 percent to 31.5 million, which is near an annual low. With a short-interest ratio of 1.08 days to cover, it is unlikely the stock will find any short-covering support. Wall Street remains enchanted by the firm as well, with 13 of the 17 analysts following GE rating it a "buy" or better. Any downgrades could spell trouble for the security.

Technically speaking, the equity continues to encounter staunch resistance in the 33.50-34 area. This region has capped the shares since April 2002. Meanwhile, the stock has consolidated into support at its 10-week moving average. A breach of this support level could spur sharp losses in the stock as the bulls unwind their optimistic positions.

Click the following link to see the Weekly Chart of GE since February 2002: http://www.schaeffersresearch.com/wire?ID=10718 .

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About Schaeffer's Investment Research (www.SchaeffersResearch.com)

Schaeffer's Investment Research, founded by Bernie Schaeffer in 1981, is a financial information and trading resources company. It publishes Bernie Schaeffer's Option Advisor, the nation's leading options subscription newsletter. The firm's contrarian approach focuses on stocks with technical and fundamental trends that run counter to investor expectations. The firm's website, http://www.SchaeffersResearch.com , is recognized as one of the leading information sources for stock and options traders and was cited as the top options website by both Forbes and Barron's. Click here for more details about Schaeffer's trading methodology: http://www.SchaeffersResearch.com/method .