NOTE TO EDITORS: The Following Is an Investment Opinion Being Issued by WallStSense.com

Visit StreetInsider.com at http://www.streetinsider.com/news.php?st=p&id=5133206 for the full story.

Here's how you avoid a value trap.

XL Capital (XL) was upgraded today by analysts at Bernstein and the stock is now at $17.89, up $0.04 (0.22%) on volume of 2,009,456 shares traded. The analysts upgraded XL to Out...(Click the story link or go to http://www.marketintelligencecenter.com for the full story)

Visit StreetInsider.com at http://www.streetinsider.com/news.php?st=p&id=5126638 for the full story.

Visit StreetInsider.com at http://www.streetinsider.com/news.php?st=p&id=5125366 for the full story.

XL Capital Ltd. (XL) last week announced its plans to expand its international operations in China. XL has received approval from the China Insurance Regulatory Commission (CIRC) to start preparatory work to set up a Property and Casualty (P&C) company in China.
 
The China Insurance Regulatory Commission is an agency of China authorized by the State Council to regulate the country’s insurance products and services market and maintain legal and stable operations in the insurance industry.
 
XL has got permission from CIRC to prepare for China operations till the second half of 2010. After the initial preparations are done, if the company receives license, it will establish an insurance subsidiary that will serve both local and international corporations in China, as well as its existing clients with operations in China.
 
Year till date, gross premium generated from the P&C operations was $4.9 billion, down from $6.4 billion last year, with a combined ratio of 92.8% compared to 96.9% in the same period last year.
 
A substantial portion of the company’s P&C insurance business and a majority of its life reinsurance business are carried on internationally, thereby leaving it vulnerable to foreign exchange fluctuations. During the third quarter of 2009, the company suffered a loss of $16.8 million in this regard, negatively affecting results.
 
XL has had a representative office in Beijing since 2006, dedicated to deepening the company’s understanding of the China market.
 
During the third quarter, the company reported earnings of 89 cents, up from 39 cents last year. Net written premiums fell 4.4% year-over-year to $1.3 billion. Premium volumes have been negatively impacted by the global economic conditions, reduction in mergers and acquisitions, exit from certain (unprofitable) lines of business and the ongoing efforts of risk managers to reduce their concentration of risk (limits) with all insurers.
 
XL Capital has also been working towards developing a reliable infrastructure that will improve operational efficiency, standardize processes and optimize costs. Though we expect net premium written by the company to remain under pressure, the above measures will help it to maintain its profitability. Therefore we maintain a Neutral rating on the shares for now.
Read the full analyst report on "XL"
Zacks Investment Research

Today’s tickers: CRI, RDC, XL, VIX, XHB, XRX, EFA, WYNN, BIDU & XHB

CRI - Carter’s Inc. – The more than 20,500 option contracts exchanged thus far today on the children’s apparel company trumps existing open interest of just 3,342 lots by a factor of 6. Shares of Carter’s are suffering significant erosion after the firm announced plans to delay its third-quarter earnings release, originally scheduled for this evening, perhaps until November 12, 2009. News of the postponement sent shares tumbling 25.5% lower to $21.16. Investor uncertainty jumped through the roof as evidenced by the massive 66% rise in option implied volatility this morning to an intraday high of 90%. Bullish investors took advantage of today’s declines by trading near-term call options. One trader put on a ratio call spread by purchasing 1,000 calls at the in-the-money November 20 strike for 2.30 apiece, and by selling 2,000 calls at the higher November 25 strike for 55 pennies each. The net cost of buying the calls is reduced to 1.20 per contract. The effective breakeven price of $21.20 on the transaction allows the investor to profit by expiration in November if shares of CRI rise at least 4 cents. Maximum potential profits of 3.80 per contract are available if the stock recovers up to $25.00. Losses would begin to accumulate if any rally lifted the share price above $28.80.

RDC - Rowan Companies, Inc. – Option traders scooped up put options on the provider of contract drilling services while shares slumped 2.75% to $24.90. The January 2010 22.5 strike had at least 1,400 puts purchased for an average premium of 1.16 apiece. The now in-the-money January 25 strike attracted traders who picked up 1,300 puts for about 2.15 each. Bearish sentiment spread to the April contract where another 2,000 puts were coveted at the April 22.5 strike for 2.02 a-pop. Finally, the most action took place at the in-the-money April 25 strike where 9,800 puts were purchased for an average of 3.18 each. Perhaps put-buying investors are aiming to protect the value of long positions in the underlying. Otherwise, traders placing bearish bets on RDC hope to accumulate profits on further share price weakness over the next several months.

XL - XL Capital Ltd. – Bullish investors took aim at XL Capital put options in the January contract this afternoon. Shares of XL are slightly higher by less than 0.25% to stand at the current price of…

Our research universe initially comprises of 1,139 stocks in 21 sub sectors which can be grouped into three super-sub sectors namely banks, finance, and insurance.[More...]

Spreads were tighter in the US as all the indices improved (though were unable to break Friday's tights and closed wider than Thursday's close). IG trades only 8.1bps tight (rich) to its 50d moving average, which is a Z-Score of -0.7s.d. At 105bps, IG has closed tighter on only 8 days so far this year (192 trading days). The last five days have seen IG converging to its 50d moving average.[More...]

Schaeffer's analyst Colleen S. King takes a look at the major news of the day on Wall Street.

Bearish is the word. Cramer bottom? Running stop signs. Schwab commercials. S&P 381. Soccer jerseys. Thermite demonstration. Amendment X. Virtual Reality. Save your 401(k). Mad Money Machine named as one of the 10 Top Investing Podcasts by US News & World Report. I ENCOURAGE you to Download this show thru iTunes! But, if you just cannot deal with [...]