'Fast Money' Recap: Microsoft Muscle

The stock market put in a second day in a row of solid gains on Thursday. The Dow finished up 108 points and the Nasdaq closed up 44 points.

According to Karen Finerman, speaking on CNBC's "Fast Money" show, the stock market is set to head higher. Tim Seymour thinks that hedge funds will push the market higher into the end of the month.

He believes the market has a lot of momentum and mentioned that a lot of fund mangers need to see the market go higher. Guy Adami said three strong earnings reports from railroad companies could be signaling that the economy isn't as weak as many think. Finerman disclosed she sold some Valero(VLO Quote) on Thursday.

3 Stocks I Saw On TV

Microsoft(MSFT Quote) reported a 79% rise in quarterly profits and raised its full-year profit outlook above Wall Street estimates. The stock traded up 5% after hours on the news. Najarian explained that Microsoft sold more than 100 million copies of its Vista operating system. Adami says $32 will be support and investors should look to buy MSFT on dips. Seymour thinks the strong report from MSFT will help lift the entire stock market Friday.

Amgen(AMGN Quote) beat analyst estimates for both sales and earnings but lowered its 2008 outlook. The shares traded up 4.5% after hours. CNBC's Mike Huckman explained that Amgen's anemia drugs sales didn't go down as much as expected. Also, Amgen put out positive data on its osteoporosis drug. Najarian thinks investors should hold off on Amgen.

Speculation hit Wall Street that billionaire Wilbur Ross is in talks to buy Ambac(ABK Quote). Finerman wouldn't be surprised if Ross buys ABK. She wouldn't be short or long the bond insurers right now. Adami explained that the financial stocks now have the Fed on their side and he expects the banks to crush the numbers for the third quarter.

Multinational Stock Trades

Adami put together a basket of U.S. based multinational stocks that he thinks will continue to see growth even if the U.S. economy slows down. His basket was made up of names like United Technologies(UTX Quote), Hewlett-Packard(HPQ Quote), Microsoft, McDonald's(MCD Quote), Boeing(BA Quote) and Honeywell(HON Quote).

Adami thinks this basket will see strong performance throughout all of 2008. Seymour added Alcoa(AA Quote), Intel(INTC Quote), Lockheed Martin(LMT Quote) and Freeport-McMoRan(FCX Quote) to the basket. Najarian added Tyco International(TYC Quote) to the list. Finerman mentioned she likes Adami's picks.

China Trade

Is it time to turn to the east for a play on economic growth? What is the trade? Seymour says now is the time to start buying China. He feels China will not see a drop in exports if the U.S. goes into a recession. Najarian thinks the way to play China is with the agriculture names like Mosaic(MOS Quote), Monsanto(MON Quote) and DuPont(DD Quote). Finerman doesn't agree with Seymour's thesis, and she explained that if the U.S. slows down, it will affect China.

Energy Trade?

Joe Terranova, director of Trading at MBF Clearing, joined the "Fast Money" crew to discuss his take on oil. Terranova says the way to play oil heading into Memorial Day is to be long the refiner names like Tesoro(TSO Quote) and Valero(VLO Quote).

Seymour and Finerman agreed with Terranova on getting into the refiners. After Memorial Day, Terranova thinks the play is to be long natural gas and hold it through Labor Day. After Labor Day, he would return to oil for the fourth quarter. Najarian mentioned ConocoPhillips(COP Quote) is worth a look.

Recession Trade

According to Dylan Ratigan, six months before a recession starts, the S&P 500 will trade down only slightly, then during a recession it stays flat. But six months after a recession, it explodes 12% higher on average. Jon Najarian says if the U.S. is in a recession, investors will want to be long consumer staples, health care and material stocks. He explained that these sectors perform the best during a recession.