Cisco Puts Jump; Nasdaq Falls Hard

A downgrade of Cisco is weighing on the Nasdaq Monday, as the average has
drifted more than 3% lower. Blue chips are the beneficiaries of the tech swoon,
with the Dow gaining more than 1.5%. Forest and paper products are the top
sectors of the day while biotechs and Internets are the weakest.

At mid-day, the VIX has decreased 1.96 to 28.95.

The OEX 740 calls are down 2 7/8 to 11 1/8.

Among bigger movers on heavier-than-average volume:

Cisco
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has fallen 3 7/16 to 47 1/4 following a Lehman Brothers
downgrade. The Cisco November 55 puts have gained 1 7/8 to 8 1/2 on more than
8000 contracts.

Microsoft
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is bucking the downward trend in tech and is trading up
2 3/16 to 69 7/8. The Microsoft November 70 calls have gained 1 to 3 on more
than 6500 contracts.

Leading the Dow is Alcoa
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which has gained 2 3/8 to 27 3/8. The Alcoa
November 25 calls have added 1 1/2 to 2 5/8 on more than quadruple the average
volume.

Phillip Morris
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has gained 1 to 37 11/16 while the Phillip Morris
January 01 42 1/2 calls have risen 5/16 to 1 3/8 on more than 2500 contracts.