'Fast Money' Recap: Financials Rally

The trading panel says the financial stocks will bounce back as the Volcker Plan runs into headwinds in Congress.
By David Tong ,

NEW YORK (

TheStreet

) -- The markets rallied again Tuesday on strong auto and home sales reports.

The

Dow Jones Industrial Average

jumped 111.32, or 1.09%, to 10,296.85 while the

S&P 500

added 14.12, or 1.30%, to 1,103.31. The

Nasdaq

climbed 18.86, or 0.87%, to 2,190.06.

Karen Finerman said on

CNBC

's "Fast Money" TV show that she expected a bounce back in the financials after Sen. Richard Shelby (R., Alabama) expressed reservations about the need for the Volcker Rule.

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 onTV

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Gary Kaminsky said he doubts whether Washington will be able to move on re-regulation because they don't seem to understand what really happened in the financial crisis.

Pete Najarian said there's not very much clarity in the financials now, noting that the

Financial SPDR

(XLF) - Get Report

has been at 14.5 for quite a long time.

Kaminsky said that if re-regulation is dead, it will benefit investment banks like

Goldman Sachs

(GS) - Get Report

and

JPMorgan Chase

(JPM) - Get Report

than the other banks.

Shifting to the overall market, Melissa Lee, the moderator of the show, said the industrials had a good day. Najarian said he particularly liked what

General Electric

(GE) - Get Report

had to say about its record backlogs, cash at the end of the year and the growth potential of the smartgrid, particularly in China.

Guy Adami was worried about

Exxon Mobil

(XOM) - Get Report

, which he said hit a second bottom on Friday following one in July. He said its earnings release was OK as he speculated that the stock would have fallen $2 to $3 if it were in the mid-$70. The stock was up slightly today, closing at $66.96.

Kaminsky called Exxon a boring stock. He said he would put his money in

Suncor

(SU) - Get Report

, which he said over the next five years, will ramp up its average production per barrel faster than any of the other majors.

Kaminsky expressed concern about the lack of deals in the industrials since early December. He said this absence signifies that CEOs aren't comfortable about their business prosects three to six months out.

What's the Obama trade off Obama's proposed federal budget? Rick Santelli, CNBC reporter, was livid about the reckless spending in Washington. Kaminsky said the best bet for investors might be in muni bonds because the federal government is sure to back them.

Lee brought in Bill Ackman, founder and CEO of Pershing Square Capital, to talk about some investment ideas behind some of his holdings. He said he likes

Kraft

's

(KFT)

deal to buy

Cadbury

(CBY)

, adding the combined company will turn into a "high-quality business."

He told the panel that it would difficult to evaluate the company's earnings until 2012. He also said there is a low probability that

Borders

(BGP)

will file for bankruptcy. He said the company has made progress from an operational and financial point of view and it trades that way. He said that Borders is a better risk-reward play than

Barnes & Noble

(BKS) - Get Report

.

Ackman declined comment on the direction of the stock market. He said his company is more about focusing on companies, "one at a time."

Is global economic growth slowing? Brian Kelly, founder of Kanundrum Capital, thinks so after looking at

C.H. Robinson Worldwide

's

(CHRW) - Get Report

earnings miss in the last quarter. Kelly said the freight-forwarder's revenue and volume declines indicate a slowdown in the global economy.

For that reason, he said he is shorting China.

Shifting to

Cisco

(CSCO) - Get Report

, which reports its earnings Wednesday, Najarian said the growth potential of bandwith could be a driver for the company, but he said the stock could fare the same way as other tech companies in this earnings season: good earnings, but bad price action.

Adami also called Cisco a great company that is fairly priced but in "no-man's land." He said there is more room on the downside for the stock. Adami's tech favorite: it's

Akamai

(AKAM) - Get Report

in the Internet space.

In the "ear to the wall" segement, Kaminsky noted that

Apple

(AAPL) - Get Report

accounts for 90% of the PCs that cost more than $1,000 in the fourth quarter. He said that Apple has such a firm grip in the small segment of the market that it will "ultimately have direct contact" with those customers.

In the final trades, Kaminsky liked Suncor while Adami was for

Walt Disney

(DIS) - Get Report

. Finerman liked

Golar LNG

(GLNG) - Get Report

, and Najarian liked

Pfizer

(PFE) - Get Report

.

-- Written by David Tong in San Francisco

To watch replays of Cramer's video segments, visit the Mad Money page onCNBC

.

"Check out

"'Fast Money'Portfolios of the Week" on Stockpickr every Thursday.

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