You can use the Oval Tool to draw ovals and circles on your stage. Click and drag to draw an oval that will expand with the motion of your mouse until you release the mouse button; to make a perfect circle, hold down the Shift key while clicking and dragging.
You can set the fill and stroke color in the Colors section of the toolbar, by selecting a shade from the color picker. In the Options section, if you click on the little magnet, it turns on snapping to objects in the scene--so that as you draw your ovals, if they draw close enough to another object the edge will automatically snap to the other object.
The Oval Tool also has Smooth and Straighten options where, after drawing your shapes, you can select them and then click the Smooth or Straighten buttons to adjust your shapes.
