Fast Money Recap: Strength in Tech
The Dow had its best one-day performance on Tuesday for the month of September by rocketing up 180 points. With the Dow now only off 5% from record levels, the team at CNBC's "Fast Money" looks for the best trade.
Tech stocks persist in outperforming the markets. Pete Najarian says global growth is the reason and likes
SAP
(SAP) - Get Report
. Jeff Macke likes the tech stocks for capital expenditures and the consumer. Guy Adami still loves
Hewlett-Packard
(HPQ) - Get Report
and he thinks
Dell
(DELL) - Get Report
has a $30 handle.
All for Oil
Oil traded up 1% as OPEC raised production less than expected. Macke says OPEC doesn't matter anymore and they basically cheat. Karen Finerman wonders if the peak oil theory will become relevant, but until it does she thinks demand for oil will increase.
Najarian says the oil service sector keeps working and he likes
Baker Hughes
(BHI)
,
Schlumberger
(SLB) - Get Report
,
Halliburton
(HAL) - Get Report
,
National-Oilwell Varco
(NOV) - Get Report
and
BJ Services
( BJS), which he owns.
Word on the Street
McDonald's
(MCD) - Get Report
traded higher after reporting blowout August same-store sales. The team seemed to all agree that MCD was a positive play. Macke likes McDonald's off the weak dollar and he recommends owning it now. Adami likes that MCD beat North American comps and Najarian likes that they had strong numbers in Asia. Finerman reiterates that the MCD numbers were strong on every front.
Financial stocks were some of the strongest performers on Tuesday led by
Lehman Brothers
( LEH). The crew continues their almost daily discussion of
Goldman Sachs
(GS) - Get Report
.
Macke says Goldman Sachs closed the day down slightly and feels the market rally wasn't really led by financials. Najarian is the contrarian and thinks GS will report a monster earnings number. However, Finerman thinks that GS will not report a record earnings number.
Macke sees GS as a sell until it breaks $190, which is its resistance level. (
RealMoney
Take: Jim Cramer said recently, "The Goldman rally is the strangest. It's almost as if Goldman was just long volatility in a levered way. That would be something!" To read more on what Cramer said,
Texas Instruments
(TXN) - Get Report
fell after hours on lighter-than-expected revenue. But Adami likes TXN and thinks it's a long-term bull story.
Masco
( ASD) fell after a Merrill Lynch downgrade. Adami thinks that Merrill is late to the party and you can own Masco down here. He feels most of the bad news is in the stock. Finerman prefers
American Standard
( ASD).
Najarian highlighted unusual call options activity on
St. Jude
(STJ)
. Najarian says he is seeing monster options activity for the September $50 calls with over 14,000 contracts trading hands Tuesday. He feels that someone is placing a bet that the company is going to be acquired.
Drug Trade
Big Pharma and Biotech continue to see positive news flow. The Fast Money crew maintains that investors should buy these stocks into the end of the year.
CNBC's
Pharmaceutical Reporter Mick Huckman joined the show to discuss the drug stocks. Huckman says
Amgen
(AMGN) - Get Report
cleared a major hurdle after the FDA rejected new restrictions on the firm's Anemia drugs, which are sold as Epogen and Aranesp.
Finerman says the Amgen news was bullish for
Davita
(DVA) - Get Report
. (
RealMoney
Take: Steven Smith recently said, "The most active strike was the September $55 calls for Amgen with 8,000 contracts traded, nearly 6,000 of that volume occurring in the last hour of trading. But overall put volume outpaced call volume by about 30,000 to 19,000 contracts." To read more on what Smith said,
Arena
(ARNA) - Get Report
reported on Tuesday that its obesity drug doesn't appear to cause Fen-Phen-like heart damage. Najarian says the market overreacted to good news on ARNA and traders should sell the rally.
Sepracor
( SEPR) shares traded higher after news that the firm plans to use
GlaxoSmithKline
(GSK) - Get Report
to market Lunesta abroad. Adami says he loves GSK and the news is bullish for SEPR.
Wireless World Play
Information that people exchange on cell phones is growing by leaps and bounds. Morgan Stanley says wireless data revenue will triple over the next five years. How can investors profit from this? Najarian says the growth is coming from data. He is bullish on
Juniper
(JNPR) - Get Report
,
Cisco
(CSCO) - Get Report
,
Nokia
(NOK) - Get Report
,
Ericsson
(ERIC) - Get Report
,
American Tower
(AMT) - Get Report
and
Crown Castle
(CCI) - Get Report
.
He also likes
Research In Motion
( RIMM). (
RealMoney
Take: Alan Farley recently said, "Research In Motion ran to a new high just two days after the Aug. 16 reversal. It peaked out above $84 the following week, pulled back and then posted another high. It has now rolled over with the broad market, but it continues to show a bullish pattern that favors a continuation of the persistent uptrend." To read more on what Farley said,
Finerman would play the data trend with
Fiber Tower
( FTWR) and
Comverse Technology
( CMVT).
Macke says
Synchronoss
(SNCR) - Get Report
is going higher and the stock is a play on booting up your cell phone from anywhere. Adami says
China Mobile
(CHL) - Get Report
still has room on the upside.
Recession Trade
According to Goldman Sachs strategist David Kostin, a recession is in the cards for the U.S. Kostin recommends buying consumer staples and health care stocks if you want to play the market from a defensive standpoint. Adami and Finerman seem to agree with Goldman's advice. Adami says
Unilever
(UL) - Get Report
could move higher and Finerman chooses
Kraft
( KFT).
Face2Face
The crew answers viewer mail and responds to Greg from Connecticut who writes, "My friend is about to sell the farm to buy the mansion on
Tenet Healthcare
(THC) - Get Report
. Any words of advice?" Najarian says forget Tenet and buy either
United Healthcare
(UNH) - Get Report
or
Wellpoint
(WLP)
.
Pops & Drops
Pops:
Nabi Biopharmaceuticals
(NABI)
exploded up 20% after the firm sold its Biologics division, but Najarian says don't look for any more.
Blackstone
(BX) - Get Report
traded up 5% after hitting a new low on Monday. Finerman says BX is good to own.
IHOP
( IHP) traded up 5% after Fidelity Investments disclosed a 13% stake in the company. Finerman is bullish on the stock.
General Motors
(GM) - Get Report
traded up 5%. Adami says the CEO figured it out.
Las Vegas Sands
(LVS) - Get Report
traded up 8%. Finerman says she likes the gaming stocks.
Option Express
( OXPS) popped 3%. Najarian says Bank of America raised all the online brokers and that is good for OXPS.
American Eagle
(AEO) - Get Report
popped 9% after an insider bought a large chunk of stock. Macke says he would take some off here and he doesn't like the group long or short. (
RealMoney
Take: Jim Cramer said recently, "Can retail be next? Yes, if there is insider buying like the execs from American Eagle, oh, and if you want to know how to make your stock stop going down, take a look at those executive purchases!!" To read more on what Cramer said,
Drops:
Countrywide Financial
( CFC) traded down 2% after news that the company is looking for a second billion-dollar infusion. Macke says get out!
King Pharmaceuticals
( KG) dropped 7% after news that generic drugs can compete with the firm's blood pressure drug Altace. Najarian thinks the upside is done.
Final Trade
The crew signs off with their final words of trading wisdom.
- Macke likes Dick's Sporting Goods (DKS) - Get Report and Under Armour (UA) - Get Report.
- Adami recommends GlaxoSmithKline (GSK) - Get Report at $54.
- Finerman says buy American Standard( ASD).
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