To create a Magnifying Glass Effect:

Magnifying glass is not just in the real world. In Flash, we can also create a magnifying glass. You can zoom a picture or even text. Maybe you can even use this for disability people that are using your computer.
Create a new Movie Clip and draw your magnifying glass; fill the glass part with any color you want (for example "Red").

Select the red and press F8, this will create a new Movie Clip that we will use as a mask.

After converting, delete it from the magnifying glass Movie Clip.

Drag both Movie Clip to the stage, one with the instance "imgMask" and the other "magGlass".

Now create a new Movie Clip just to hold our image, drag it to the stage and give the instance name "imgHolder".

Paste this on the first frame:

//load an image named "image.jpg" to the imgHolder Movie Clip
loadMovie('image.jpg', imgHolder);

//new Movie Clip just to hold the zoomed image
this.createEmptyMovieClip("zoomImg", 33);

//Set a mask inside the Movie Clip so the zoomed image is rounded
zoomImg.setMask(imgMask);

// bitmap object to zoom the image
var zoomBitmap = new flash.display.BitmapData(155, 155, false, 0xEAEAEA);

//attach the bitmap to the" zoomImg" Movie Clip
zoomImg.attachBitmap(zoomBitmap, 5);

//zoom power, increase this to zoom more
var magPower = 2;

//matrix object to position the zoomed bitmap inside the magnifier var zoomMtx = new flash.geom.Matrix();

//scale the image using the "magPower"
zoomMtx.scale(magPower, magPower);

//swap depths for the magnifier Movie Clip so it is on top magGlass.swapDepths(_root.getNextHighestDepth());

_root.onEnterFrame = function() {

//hide the mouse
Mouse.hide();

//set the magnifier Movie Clip to the position of the mouse
magGlass._x = _xmouse - 70;

//so the mouse is in the middle of the lens
magGlass._y = _ymouse - 70;

//zoomed image Movie Clip
zoomImg._x = magGlass._x;
zoomImg._y = magGlass._y;

//Mask Movie Clip
imgMask._x = magGlass._x;
imgMask._y = magGlass._y;

//where to draw the zoomed image
zoomMtx.tx = -_xmouse * magPower;
zoomMtx.ty = -_ymouse * magPower;

//draw zoomed image using the image in the
//holder and the position of the matrix.
zoomBitmap.draw(imgHolder, zoomMtx);
}