'Fast Money' Recap: Financials Rally
NEW YORK (
) -- 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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