USA: Anheuser-Busch rises as investor worries decline

Anheuser-Busch (BUD) opened at $46.36, according to Market Intelligence Center, March 19. So far today the stock has hit a low of $46.36 and a high of $47.18. BUD is now trading at $46.93, up 0.68 (1.46%). After hitting a one-year high of $55.19 in June, the stock hit a one-year low of $45.55 yesterday.

Shares of BUD are rising with the broader market this morning as investors have reacted positively to better-than-expected earnings from Morgan Stanley (MS) and a government plan to inject $200 billion into the mortgage market. Both moves, combined with yesterday's interest-rate cut by the Federal Reserve, have investors hopeful that the economy can avoid a recession.

However, some fears still exist, but BUD is seen as a defensive stock and might be one of the first to regain its footing. Technical indicators for BUD are bearish and steady, while S&P gives the stock a positive 4 STARS (out of 5) buy rating. If you’re looking for a hedged play on this stock, consider a September bull-put credit spread below the $40 range. BUD hasn’t been below $45 at all in the past year and has shown support around $46 recently. This trade could be risky if the company's earnings (due out in mid-April) disappoint, but even if that happens, this position could be protected by the support the stock might find around $46, where it has bottomed over the past month.

19 March, 2008