As the worst CPI since June 2006 and discouraging housing numbers rekindled concerns about inflation and the overall state of the economy, Hewlett-Packard (HPQ Quote - Cramer on HPQ - Stock Picks) helped drive large-cap tech names past the bad news. The Dow ticked up 0.7%, the S&P 500 rose 0.8% and the Nasdaq climbed 0.9%.
On
CNBC's "Fast Money" TV show Wednesday, Guy Adami said that Hewlett-Packard wasn't the only story. He believes that
Intel (INTC Quote - Cramer on INTC - Stock Picks) and
Microsoft (MSFT Quote - Cramer on MSFT - Stock Picks) have been so beaten up that they rose to fair valuations today. Jeff Macke lauded Hewlett-Packard for simply producing good numbers, but advocated selling into strength.
Tim Seymour remarked that the positive action is all the more incredible given a discouraging inflation number. He reminded viewers that subprime, asset-backed and commercial paper are all still a problem. He was skeptical that the day's bull run would last.
The market rise occurred in the face of crude oil prices hitting $101 a barrel. Karen Finerman explained that, adjusted for inflation, oil isn't at all-time highs, and that geopolitical variables are dampening concern about supply. She speculated that if the U.S. stays in a recession, oil should come back down. Macke said that from a technical standpoint, oil is poised for a breakout to the upside.
Adami recommended natural gas as a trade on expensive oil. He named
Apache (APA Quote - Cramer on APA - Stock Picks) and
XTO Energy (XTO Quote - Cramer on XTO - Stock Picks) as plays on the trend. Finerman suggested
Devon Energy (DVN Quote - Cramer on DVN - Stock Picks).
Garmin (GRMN Quote - Cramer on GRMN - Stock Picks) fell after a solid quarter on a bad conference call. The navigation company said it expects to drop prices. Finerman is short Garmin, but said she would not be short here. Macke said the stock will likely drift lower but isn't worth trading.
Solar Failure in 2008
Suntech Power (STP Quote - Cramer on STP - Stock Picks) got hammered today on earnings. Seymour remarked that the company can't meet rising demand. He mentioned a snowstorm in China as part of the reason for the bad numbers. Adami said
Evergreen Solar (ESLR Quote - Cramer on ESLR - Stock Picks) looked attractive at these levels. Macke reminded viewers that the solar stocks are not mature, so they trade together. He recommended
Cypress Semiconductor(CY Quote - Cramer on CY - Stock Picks).
In keeping with the week's theme of successful food names,
PepsiCo (PEP Quote - Cramer on PEP - Stock Picks) reaffirmed guidance. Macke said food and drink continue to work. He also likes
Coca-Cola (KO Quote - Cramer on KO - Stock Picks) and beer stocks, and advocated buying on dips. Seymour lauded the companies' international exposure. Adami agreed, but said he prefers Pepsi.
Playbook: Telecoms
Verizon (VZ Quote - Cramer on VZ - Stock Picks) and
AT&T (T Quote - Cramer on T - Stock Picks) both rolled out new $99-per-month unlimited calling payment plans, and both stocks fell as a result.
Dennis Kneale,
CNBC's media and technology editor, joined "Fast Money" to discuss trades on the developments. He said the plan adjustment was not a price war. He noted that Verizon's average monthly revenue is $51.49, so a $99 price is an improvement. He also cautioned that wireless revenue is only 36% of total revenue for AT&T. Macke disagreed, pointing out that
Sprint (S Quote - Cramer on S - Stock Picks), down so much, was desperate enough to cause problems for the other telecoms. He called the hardware companies the winners. Kneale differed, saying the carriers never win.
Adami called the dip in AT&T a good entry point. Seymour recommended international telecom plays such as
Vimpelcom (VIP Quote - Cramer on VIP - Stock Picks),
Mobile Telesystems (MBT Quote - Cramer on MBT - Stock Picks) and
China Mobile (CHL Quote - Cramer on CHL - Stock Picks).
Inflation Plays
With inflation on the rise, Finerman suggested buying TIPS, or inflation index bonds, along with
Vanguard Inflation-Protected Securities (VIPSX Quote - Cramer on VIPSX - Stock Picks) and
Pimco's Real Return A (PRTNX Quote - Cramer on PRTNX - Stock Picks). Adami recommended defense stocks such as
Lockheed Martin (LMT Quote - Cramer on LMT - Stock Picks),
General Dynamics (GD Quote - Cramer on GD - Stock Picks) and
Raytheon (RTN Quote - Cramer on RTN - Stock Picks).
Bourse Ultimatum
The traders discussed a deal between the
Chicago Mercantile Exchange (CME Quote - Cramer on CME - Stock Picks) and the
Nymex (NMX Quote - Cramer on NMX - Stock Picks). Adami compared the deal to Microsoft's buyout of
Yahoo! (YHOO Quote - Cramer on YHOO - Stock Picks). He also believes
NYSE Euronext (NYX Quote - Cramer on NYX - Stock Picks) can't get much cheaper, and the
Nasdaq Stock Market (NDAQ Quote - Cramer on NDAQ - Stock Picks) is even less expensive. He recommends owning both. Macke took the other side. He believes that the Department of Justice's interference in the rollup story and a bear market's attendant low trading volume are reasons to avoid the exchanges.
Trader Radar
NutriSystem (NTRI Quote - Cramer on NTRI - Stock Picks) traded at eight times its average daily volume today.
Sovereign Funds Go Solar
Stockpickr Staff
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