'Fast Money' Recap: We're Not Done Sinking

Stockpickr Staff

On another tough Thursday for stocks in the U.S., continued concerns about the credit market continued to hold the major indices down. The Dow lost 1.8%, the S&P 500 dropped 2.2%, and the Nasdaq was off 2.3%

On CNBC's "Fast Money" TV show, Guy Adami said, "We're in a bear market. Rallies have to be sold." He pointed to the railroads as a bull market, saying that Burlington Northern Santa Fe (BNI) is reaching attractive levels. He also said he likes DuPont (DD) on a valuation basis.

Jeff Macke said that although the markets were back to last summer's low, there wasn't the same panic. Goldman Sachs (GS) fell to $158, which is an attractive level, he said, but he would've liked to see more volatility.

Pete Najarian said that with Citigroup (C) trading at book value and with the airlines, Carnival (CCL) and the hotels clobbered, it's a tough market. He agreed that the volatility wasn't where it should be for a bottom. With oil at $105 and foreclosures and delinquencies causing problems, it's ugly, he said, but he said he doesn't see a bottom before commercial real estate loan data comes through.

Karen Finerman agreed that she'd like to see more volatility. She'd be happy if the VIX hit 30. If it does that, she said, she'll take hedges off the table and start getting longer.

Jeff Macke said the most bullish scenario would be a big ugly open on Monday followed by a rally. He urged viewers to be patient. Najarian agreed, adding that bottom-fishers in Goldman Sachs should wait through the weekend and take a look at the stock ahead of earnings.

With the financials at a five-year low and Bear Stearns taking down estimates on Washington Mutual (WM) and others in the space, Najarian said that Fannie Mae (FNM), Freddie Mac (FRE) and Annaly (NLY) all looked terrible today. He noted heavy put activity on the sector as well as for US Bancorp (USB), shares of which have held up better thanks to Warren Buffett's investment in the company. He said to be careful with US Bancorp.

Macke suggested that investors make a list of names to buy into the selloff. He recommended buying panic in the Financial Select SPDR (XLF) ETF.

Adami suggested looking at Ameriprise Financial (AMP) as an asset-management play on the aging baby boomers. He said he likes the stock at these levels. Finerman agreed. She added that her hedge fund is almost out of its Lehman Brothers (LEH) short position.

Najarian said there's plenty of room to the downside for the next couple of weeks. This is not the bottom, he cautioned.

In the commodities, Macke noted that oil broke out at $105 a barrel. He recommended buying the U.S. Oil Fund (USO) ETF. He said to stick with the charts on commodities, and he recommended the oil fund over the streetTracks Gold (GLD) ETF.

Adami cautioned viewers that despite the rise in oil, Exxon Mobil (XOM) was down 2.5% today. He suggested going to other stocks, such as Baker Hughes (BHI), Schlumberger (SLB) and Halliburton (HAL).

Najarian said to stay away from oil refiners. He said that there was profit-taking in the integrated oil names. After today's selloff in ConocoPhillips (COP) and Exxon, he predicted the names to be up tomorrow. Adami reminded viewers that Apache (APA) is cheap on a valuation basis. Najarain also stressed that Joy Global (JOYG) crushed earnings today and rose 4% on abysmal tape. Joy and Bucyrus (BUCY) are both bullish stories.

After Wal-Mart (WMT) beat on earnings today, Finerman said that the retailer is delivering value and price, which is what the customer needs right now.

Macke said that the Wal-Mart is a steady stock and that this is the best you can expect from the stock. Other names got beaten up, he said. Adami cautioned against shorting specialty and luxury retailers like Saks (SKS) at these levels. In fact, he said, many of them are getting attractive. Macke agreed. Finerman also said she likes Children's Place (PLCE) after it took a hit today.

Apple (AAPL) is building business features into its iPhone, but don't throw away your Research In Motion (RIMM) BlackBerries just yet, said Adami. Apple is a value stock at these levels, though, he said, citing a bullish outlook from Intel (INTC) as cause for bullish sentiment.

Najarian said that investors should wait for a few days' consolidation under $100 in RIM. He also recommended taking a look at InterDigital (IDCC). That's the company that gives phones their 3G abilities, he said.

The crew noted that stocks are below January lows. To comment on the situation, they welcomed John Roque, technical analyst at Natexis Bleichroeder. He said that volume indicated that the market is not anywhere near a bottom. He said his firm has advocated selling financials and buying commodities for a long time. He said that the reason the market isn't bottoming is because people want to buy financials on their way down, which isn't working. He said that commodities will continue to rise. He predicted that the S&P 500 would come down to 1236, and he recommended buying commodities on any pullback or consolidation.

Looking ahead to the February jobs report, the crew welcomed Joe LaVorgna of Deutsche Bank. "It's more doom," he said. "The numbers are going to be terrible."

He said that all the metrics Deutsche Bank uses to measure the economy point downward. He forecast more pain so long as the financials grapple with the bond insurer problem and attempt to deleverage. Wages are not holding up, he said, because rising commodity prices are causing a decline in inflation-adjusted household incomes. He predicted a 2% fed funds rate by April and a mild recession.

Oracle (ORCL) announced its earnings report date today. Adami said this was significant because if the company were going to warn about a miss, they would have done it today. He noted that Goldman Sachs reinitiated a buy rating. He said he's a buyer of the stock.

Najarian remarked that Goldman has been red hot on its upgrades and downgrades. Macke said that Oracle is a huge software rollup company. With weakening competitors and a robust pipeline, he was bullish on the stock.

Finerman said that the tech trade has now become a value trade. She said she was sticking with Microsoft (MSFT).

Trader Radar

Verizon (VZ) was one of the most searched stocks on Google by investors today.

R.I.P. Trades -- Yellow Pages

As advertising revenues blank and Yahoo! (YHOO), the cell phone and Google take revenue away from phone book publishers R.H. Donnelly (RHD) and Idearc (IAR), the "Fast Money" traders explored ways to play the demise of yellow pages.

Finerman said that Google and Yahoo! were plays on the fall of phone books. She also suggested ValueClick (VCLK) as a tangential way to game directories' decline. Najarian said to take a look at Monster Worldwide (MNST) and Focus Media (FMCN).

Fast Messages

A viewer asked Adami about AIG (AIG). Adami said to wait for a 100 million share volume day when the stock gets washed out. The stock is just a trading vehicle, he warned.

Another "Fast Money" fan asked Finerman how Microsoft could win if the Yahoo! acquisition falls through. Finerman said the stock is down $45 billion, and Yahoo! will likely be bought for $44 billion dollars. Because she doesn't believe Yahoo! is worth nothing, she thinks the company has already been penalized for the acquisition.

Macke told a person who wrote in that Costco (COST) is a long-term story. He said along with Costco, Wal-Mart and the Gap (GPS) are the only merchandisers he'll touch.

Pete Najarian told another emailer that he would only short commodities in the very short term. He said the pullback would be followed by an upswing and would rather roll into commodity names on dips.

Final Trade

Macke selected Campbell Soup (CPB). Adami chose XTO Energy (XTO). Finerman picked R.J. Reynolds (RJR). Najarian expressed preference for InterDigital.

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