U.S. stocks sold off today on fears economic growth will slow in the spring of 2007 resulting in weaker corporate earnings per share.

CVS Corporation (CVS) and Caremark Rx, Inc. (CMX) confirmed a merger of equals. Caremark shareholders will receive 1.67 shares of CVS Corporation for each share of Caremark. Both companies option volume was heavy as arbitrageurs, speculators and hedgers adjusted their positions. Both companies option trading implied volatility migrated to 29, near the 26-week average for both CVS Corporation and Caremark. Walgreen's (WAG) and Express Scripts (ESRX) both sold off on the uncertainty of how Caremark and CVS Corporation's new business model will change the prescription market.

The S&P 500 is down .81%, NASDAQ 100 is down 1.45%, The Dow is down 54% and the 10 year bond rate declined to 4.560%. The CBOE VIX was up .44 to 11.54.

The Canadian government indicted it plans to introduce a tax next year on distributions paid by trusts. Canadian energy trusts sold off. Canetic Res Trust (CNE) was down 2.93 to $14.79 and Canetic Res Trust's December option implied that volatility rose to 39 from 27.

Enerplus Resources (ERF) was down 8.14 to $45.16 and it's December option implied that volatility rose to 32 from 23.

Harvest Energy Trust (HTE) was down 4.33 to $25.03 and it's December option implied that volatility rose to 38 from 22 according to Track Data.

Option volume leaders today were Garmin Ltd. (GRMN), Apple Computer, Inc (AAPL), Newmont Mining Corporation (NEM), CVS Corporation (CVS), Qualcomm, Inc. (QCOM) and Dell, Inc. (DELL).

Options Update is provided by Paul Foster and TheFlyOnTheWall.com (subscription required).