'Fast Money' Recap: Oil Boils

The U.S. stock market took a belly flop Friday as a record-setting climb in oil prices made for splashy headlines and sparked an equity selloff. The Dow plunged 3.1%, the S&P 500 took a 3.1% bath and the Nasdaq sank 3%.

On CNBC's "Fast Money" TV show, the traders observed that oil spiked 8% today and the stock market experienced its worst losses since the "Shanghai Swoon" of Febuary 2007. Pete Najarian said that bulls should be nervous going into the weekend. He said that oil and natural gas were ripping. He said the rise in those prices combined with problems in the financials hurt the market. The Financial Select Sector SPDR (XLF Quote - Cramer on XLF - Stock Picks) "got crushed," he said.

Jeff Macke said rising energy prices are "killing everything." It's a bubble, he said. He pointed out that every bubble has a great story behind it, but the rally in energy hearkens to other bubbles.

Guy Adami said that the action is indicating that crude oil is inelastic. He pointed out that General Motors (GM Quote - Cramer on GM - Stock Picks) reported that auto sales declined more than expected.

Karen Finerman said that her first instinct on today's down tape is to reduce the size of her positions on both sides. With volatility up, protection gets expensive, she said. She also said she would prefer not to sell puts in this environment.

Macke said that the best strategy is to sell any upward move that looks giddy and to buy absolute panic. He said the hard trade is to build positions here. He said he's been looking for the dip in names like Citigroup (C Quote - Cramer on C - Stock Picks), Lehman Brothers (LEH Quote - Cramer on LEH - Stock Picks) and Goldman Sachs (GS Quote - Cramer on GS - Stock Picks). He urged investors to "suck it up and buy in scale."

Adami said that there are tells in stocks that performed well despite the down day. He said viewers should stick with what works -- natural gas and the railroads.

Najarian recommended being a buyer in the financials, but said investors shouldn't rush in. He cautioned against trying to pick a bottom, and recommended using put protection on long positions. He said that the selloff in the Oil Service HOLDRs (OIH Quote - Cramer on OIH - Stock Picks) at the end of the day was profit-taking by investors who had been hurt in other areas of the market.

The transportation sector and the airlines got hurt. Macke said the airlines are going to be a long story, and he said investors shouldn't chase airline stocks higher.

Adami said that transports are about trains. He said CSX (CSX Quote - Cramer on CSX - Stock Picks) still has pricing power. He said airline AMR (AMR Quote - Cramer on AMR - Stock Picks) has been a trade.

Najarian recommended sticking with the rails for their pricing power.

Of discretionary consumption, Finerman said that it's hard to ignore the major spike in oil prices. Jeff Macke said that unemployment and crude have created a "double whammy" for the consumer. He said the only retailers he's interested in are Wal-Mart (WMT Quote - Cramer on WMT - Stock Picks) and Costco (COST Quote - Cramer on COST - Stock Picks)

Technology stocks got beaten today. Najarian said he thinks the decline is an opportunity. He said that impressive global numbers from Dell (DELL Quote - Cramer on DELL - Stock Picks) make that stock interesting. He said the pullback in IBM (IBM Quote - Cramer on IBM - Stock Picks) is an occasion to buy and he's also interested in Cisco (CSCO Quote - Cramer on CSCO - Stock Picks) and National Semiconductor (NSM Quote - Cramer on NSM - Stock Picks). Tech is going to work in the second half of the year, he said.

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