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'Fast Money' Recap: Uncertainty Looms

Stocks in this article: SQQQ GLD POT

NEW YORK ( TheStreet) -- Cisco's (CSCO) disappointing earnings brought further gloom to the markets Wednesday.

The report added further angst to a day that saw the Dow Jones Industrial Average plunge 265.42, or 2.49%, to 10,378.83, while the S&P 500 fell 31.59, or 2.82%, to 1,089.47. The Nasdaq lost 68.54, or 3.01%, to 2,208.63.

Jon Najarian said on CNBC's "Fast Money" TV show, wondered whether Cisco's earnings will drag the market down further on Thursday.

Joe Terranova said today's trade deficit numbers could lop off 1% from the second-quarter GDP. He said big money managers are concerned about the absence of fiscal stimulus to get the economy moving again.

For a breakout of some stocks from a recent "Fast Money" TV show, check out Dan Fitzpatrick's "3 Stocks I Saw on TV."

3 Stocks I Saw on TV

Karen Finerman, though, said the markets are starting to get certainty that Congress will not extend the Bush tax cuts.

Guy Adami said he hopes Fed Chairman Ben Bernanke likes Japan, because he feels the bond market is telling us that "we have become Japan." He said there are three important signs to watch as the market plunges: the S&P falling below its 200-day moving average, the rise of the dollar against the euro, and the rise in the VIX.

Melissa Lee, the moderator of the show, shifted to Cisco, the major story in the afterhours. She said Cisco saw gross margins slip and its revenue fall below expectations. Adamai said he was worried about an inventory build.

John Fortt, a CNBC reporter on the Cisco conference call, said that CEO John Chambers said he agreed with the Fed's report a day earlier about slower growth and choppy conditions ahead.

According to Fortt, Chambers defended Cisco's operating margins and 12.7% long-term growth rate. He also said the CEO said he had a difficult time reading the signals in the economy.

Najarian said the options market was blindslided by the "cautious" comments by Chambers who was so optimistic the quarter before. Terranova said the situation looked particular gloomy because investors were not getting any relief from China, with its uncertain outlook.

Lee said Cisco's slide in afterhours was affecting tech and blue-chip stocks such as IBM (IBM), Microsoft (MSFT) and Apple (AAPL), which were also trading down.

She brought in Anthony Scaramucci to comment on how hedge funds were reacting to the market plunge. He said the big players were talking about only a 5% to 10% correction because "a ton of derisking has already taken place" and the S&P's fundamentals appear intact.

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