Wednesday Market Rap: GM, F, NEM, ODP & SLM

The big news of the day is that GM was able to reach an agreement with the unions ending the strike; but more importantly using the union to help relieve itself of health care cost. This should be of long term benefit to GM. Overall we saw a day with mild buying in the market.

The NYSE had volume of 3.2 billion shares with 2,144 shares advancing while 1,156 declined for a gain of 46.3 points to close at 9,980.12. On the NASDAQ, 2 billion shares traded, 1,785 advanced and 1,210 declined for a gain of 15.58 to 2,699.03.

General Motors (NYSE: GM) rose 3.22 (9%) to 37.64 on news of the union settlement. Ford Motor (NYSE: F) rose $0.54 (6%) to $8.88 after the GM deal; it should also be able to work something out. Under Armour (NYSE: UA) fell $3.95 (-6%) to $60.10 on a downgrade. Newmont Mining (NYSE: NEM) fell $2.79 (-6%) to $44.90 after warning on thinning reserves. Office Depot (NYSE: ODP) rose $1.03 (5%) to $20.25 on an upgrade.

In options there were 4.6 million puts and 5.7 million calls traded for a put/call open interest ratio of 0.81. The automakers saw some heavy option activity. Given the magnitude of health care costs on the automakers, it is not surprising to see optimistic activity. General Motors (NYSE: GM) saw heavy volume on the October 40 calls (GMJH) with over 53,600 options trading while the October 35 calls (GMJG) with over 29,600 options trading. Ford Motor (NYSE: F) saw heavy volume on the January 5 puts (VFOMA) with over 46,600 options trading. Sallie Mae's deal seems to be falling threw and that likely spured the put activity today. SLM Holding (NYSE: SLM) saw heavy volume on the October 50 calls (SLMJJ) with over 20,400 options trading and the October 40 puts (SLMVH) with over 28,000 options trading.

Kevin Kersten is an Options Analyst with InvestorsObserver.com. Disclosure note: Mr. Kersten is long Office Depot (NYSE: ODP).