*Scanning all single-stocks subject to 2500 contracts minimum call or put volume

Wells Fargo (WFC) is up 18 cents to $25.67 in active trading after the bank became the latest to announce plans to repay TARP funds. WFC will issue $10.4 bln in stock at $25 per share. While the move will dilute future earnings to shareholders, WFC is up on a day when the financials (XLF) are off 1.4 percent. In the options, trading in WFC is running 2X the average daily, with 113K calls and 139K puts traded so far. Noteworthy trades include a Jan 27.5 – 30 call spread bought at 49 cents, 15000X, against stock at $26.13 delta neutral. 34K Jan 21 puts bot at 15 cents against shares at $26.15, delta neutral. Jan 25 – 27.5 put spread sold at $1.28, 10000X.

*Scanning all single-stocks subject to 2500 contracts minimum call or put volume

Boston Scientific shares are up 5c to 8.98 and option volume is 6x the daily average with some 23,000 calls traded to less than 1,000 puts. Nearly 82% of the volume has been on the ask side with trading taking place across the Jan. , Feb. and March expirations in the $9 and $10 strikes. Several sweeps of multi-thousand contract transactions were detected. While some of the activity might be closing and rolling out the general order flow is decidedly bullish

Weyerhaeuser (WY) is up $2.50 to $45.01 and options are seeing action after the company announced plans to convert to a real estate investment trust [REIT]. The timing is still under consideration, but by the end of the year of conversion ,WY must issue a special, taxable dividend of its undistributed earnings and profits. It expects 2010 earnings and profits of just under $6 billion. In the options market, the focus is on the short-term, however, with Dec and Jan 46 calls trading ask-side. 5990 calls and 2780 puts traded so far, or about 3X the average daily volume.

Hexcel (HXL) traded 30X average call volume Monday, with 3,110 traded. December $12.50 calls were bought with shares at $12 just 4 days from expiry, and June $15 calls traded offer side in multiple 100+ contract lots. Shares broke out of a wedge today and have seen strong buying volume the last few days. IV has jumped from 73% to 79% in the last couple days. The composites maker for aerospace and defense, as well as wind energy, could see positive movement with the Boeing (BA) Dreamliner launch coming, if successful, as demand for materials will pick up. Shares trade at a PEG of 0.93, 18.8X cash flow, and 19.7X earnings, but there is major upside potential. The breakout seen today on the chart could gain some steam and send shares much higher.

Stocks are indicated lower on disappointing economic data Tuesday. Less than thirty minutes before the opening bell on Wall Street, stock index futures indicate that the Dow Jones Industrial Average might lose 40 or 50 points at the open.

Stock index futures fell after the latest Producer Price Index [PPI] jumped a surprising 1.8 percent in November, up from .3 percent in October and much hotter than the .8 percent economists had expected. Stripping out food and energy, the core PPI rose .5 percent and also more than the .5 percent economists had expected.

While PPI suggests that inflation is picking up, separate data showed a slump in Northeast manufacturing activity. The NY Empire State Index fell to only 2.55 in December, down from 23.51 in November and much worse than the 24.0 economists had expected.

Traders in the bond pits are focused on the hot PPI number. The benchmark ten-year Treasury is down 16/32nd and its yield is moving beyond 3.6 percent.

The dollar is seeing big gains, up .99 to 89.54 against the Japanese yen. The euro was slammed, down .0111 to 1.4545 against the buck.

A report on industrial production is due out at 9:15 eastern time. Economists expect an increase of .5 percent for November, up from .1 percent the month before.


Commodities are mixed. While crude oil gained .40 to $69.71 a barrel, gold lost $6.30 to $1117.50 an ounce.

Among the stocks to watch, Best Buy (BBY) is down 5 percent after the electronics retailer reported strong third quarter earnings, but also warned that it expects lower fourth quarter gross profit rate than previously expected. JA Solar (JASO) is up 3.5 percent after raising its fourth quarter earnings guidance. Quest (Q) is expected to open higher after UBS upgraded the stock to Buy from Neutral. Adobe (ADBE) and Take Two (TTWO) might see action ahead of earnings, due out after the closing bell.