'Fast Money' Recap: Hunting for Bear

A 45-minute rally on benign inflation data at the beginning of Friday's session was quickly reversed on news of a Federal Reserve bailout for Bear Stearns (BSC Quote). The Dow was down 1.6%, the S&P 500 lost 2.1%, and the Nasdaq was off 2.3%.

On CNBC's "Fast Money" TV show, Pete Najarian called Bear's falling price action on the day "unbelievable." He noted that the week had been packed with news, from the Eliot Spitzer scandal to fairly tame inflation data to the Bear Stearns catastrophe. He said the Bear news was at first met calmly, but as volatility reached 700%, the selling reached high levels. Trades in put options on Bear were highly profitable today, he said.

Lehman Brothers (LEH Quote) is experiencing the same kind of put-buying the market saw on Tuesday for Bear. A lot of people are concerned, he said.

Karen Finerman said that it was hard to disconnect a visceral reaction from rationality in this week's market. When things are down in integers, you got to buy, she said. Although her hedge fund is nearly perfectly hedged, she called the environment "scary." ...