Patrick M. Fitzgibbons Chats on AOL, May 22

Patrick Fitzgibbons chatted on AOL MarketTalk on Monday, May 22. AOL's MarketTalk is hosted by Sage Online (Keyword: PF Live).

OnlineHost: Live from New York, N.Y., please welcome Pat Fitzgibbons, markets editor, TheStreet.com.

OnlineHost: Pat can answer questions about the markets and investing. Pat does NOT offer individual stock commentaries or recommendations.

SageMoola: Good afternoon and welcome to MarketTalk, Mr. Fitzgibbons!

PFitzgibbo: Hi everybody, nice to be here today in a crazy market.

Question: Will the recent bout of computer viruses have a negative effect on corporate profits this quarter?

Pfitzgibbo: It's hard to say right now, but if companies were able to absorb the Y2K costs, they can probably withstand this.

Question: Will ING make another effort to buy AET?

PFitzgibbo: It's always difficult to predict mergers, but, with the rebound of the insurance stocks, it certainly is possible.

Question: I saw Cramer on Larry King last summer -- said Greenspan would raise until election. Still think so?

PFitzgibbo: It seems that there's probably about 75 basis points still in the market. And I wouldn't be surprised to see if they did another 50 in June and 25 sometime before the election. I think the closer it gets to the election, the less likely the FOMC is to make a move.

Question: When will the Nasdaq start to feel some upward pressure?

PFitzgibbo: It's probably easier to say what's providing the downward pressure to the Nasdaq right now? Like the other indices, the Nasdaq is being hurt by uncertainty as to what the Fed is going to do and when they're going to do it.

PFitzgibbo: I think as more economic data come in, and we get a better picture of the economy and the overall economic strength, then we can sort of count on what the Fed will do and make a better bet on it. Investors in general never like uncertainty.

Question: What is your feeling about drinking and trading? I have noticed that when I am liquored up, that my judgment, although clouded is dead-on.

PFitzgibbo: Well, certainly drinking and trading should never be encouraged, especially when dealing with the kids' college fund! However, if you have thrown all the money into some of those names like Pillowtex or Boston Chicken or drkoop, drinking may actually be just the right thing!

Question: Does it appear as if the defense and aerospace sector is finally turning around, as earnings seem to be picking up and defense spending may be on the rise?

PFitzgibbo: I think that defense stocks are going to depend a lot on what the presidential election brings. If, in fact, defense stocks as a sector are doing better now, I think it's more the fact that it seems that Governor Bush is in the lead. Or is leading right now.

PFitzgibbo: I don't think there's anything compelling to suggest that there's going to be a ramp up in military spending, similar to what happened in the '80s, but typically a Republican presidency results in more defense spending.

Question: Do you think the market will continue with sideline money until the Fed finish their hikes? Thanks.

PFitzgibbo: I think that there will be less money going into the market as long as there's still this degree of uncertainty in the market. Whether that ends up being directly tied into the Fed or not, I think it will largely depend on what the economy looks like in the next couple of months.

Question: Will retailers like Saks (SKS) and J.C. Penney (JCP) be able to win back market share from the discount department store giants like Wal-Mart [WMT]?

PFitzgibbo: Some of the old-line companies have had a harder time in competing with stores like WalMart and Costco, but if they can put into place some of the practices that those companies have done, then there's no reason that they shouldn't be able to compete with them.

PFitzgibbo: That said, I think that companies like Sears and J.C. Penney have a lot more overhead and a lot more expenses than do WalMart or Costco or one of those.

Question: How can I make money in a bear market?

PFitzgibbo: The way to make money in a bear market is to typically be a sensible investor. The last year it's been pretty easy to make money, because almost everything, it seems, has gone up.

PFitzgibbo: In this kind of market, if this is, in fact, a bear market then you have to be more of a stock picker, you have to look more at fundamentals, you have to check managements and you just have to make sure that you do your research on stocks because nothing is going to be automatic in this market.

Question: Will tobacco litigation continue to pressure Philip Morris (MO)?

PFitzgibbo: Yes, it appears that it will. It looks like it will, like with the rest of the market, there's a sort of uncertainty as to what sort of fines are actually going to be imposed by this whole thing. Many investors have steered clear of tobacco stocks because of the fears of earnings and because of the stigma attached to tobacco companies. I think that will likely continue.

Question: What is the debt market?

PFitzgibbo: The debt markets are a little different than the stock markets, because, for example, municipal bonds are part of the debt markets. Municipalities will often sell bonds or debt to allow them to do projects to make investments of their own or whatever. Like in the case of municipal bonds, you are getting a wholly tax free investment.

SageMoola: Thank you very much for joining us today, Mr. Fitzgibbons!

PFitzgibbo: Thank you very much for having me and we'll see you soon at TheStreet.com.