'Fast Money' Recap: Goldman Overhang

The trading panel discussed the impact of Goldman's woes on the markets.
By David Tong ,

NEW YORK (

TheStreet

) -- The markets took a gloomy turn Friday on reports that federal prosecutors have begun a criminal probe of

Goldman Sachs

(GS) - Get Report

over its mortgage subprime deals.

The

Dow Jones Industrial Average

dropped 158.71, or 1.42%, to 11,008.61, while the

S&P 500

fell 20.10, or 1.67%, to 1,186.68. The

Nasdaq

gave up 50.73, or 2.02%, to 2,461.19.

Peter Najarian said on

CNBC

's "Fast Money" TV show that investors had no safe havens such as earnings, dividends and industrial names to offset the slew of bad news from Goldman and Europe that sent the markets down.

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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Guy Adami said Goldman, which closed down $15.04, or 9.39%, to $145.20, broke through an important technical level of $147.81 and appears headed lower to $135.25.

Tim Seymour said the situation is just as grim in Europe with

Barclays

(BCS) - Get Report

under "some investigation" and European banks under the cloud of the Greek debt crisis.

Melissa Lee, the moderator of the show, asked Karen Finerman if this would be a good time to buy Goldman. Finerman said it might be if the situation leads Goldman to a settlement. She also said she wouldn't surprised to see a change at the top.

Finerman wondered whether Goldman's problems will give the Obama administration "enough juice" on financial reform that it would eventually would hurt Goldman's prop desk.

Adami, who used to work at Goldman's, said it might be a galvanizing moment for Goldman and an opportunity for it to get back on track.

Lee noted that Bank of America cut its rating of Goldman to neutral from a buy. Najarian said those was explosive options activity in Goldman but that most of it was on the call side.

Adami noted that

Jefferies Group

(JEF) - Get Report

continues to perform well.

With his "ear to the wall," Gary Kaminsky said he bailed out of Goldman stock today because it's "too fluid to have a position" in it. He said Goldman is clearly distracted from what is going on and that is going to have a negative impact on the markets.

Shifting to Europe and Greek bailout discussions over the weekend, Dennis Gartman said he expects very little will be done until after the German elections. Tim Seymour said Moody's is threatening a multi-noch downgrade if a bailout plan isn't settled on this weekend.

Gartman said the euro will continue to slide. He said the best place to be is in gold futures and

SPDR Gold

(GLD) - Get Report

and short

Euro Shares

(FXE) - Get Report

.

Turning to the oil spill off Louisiana, Finerman acknowledged she lost money in calls she made Thursday in

BP

(BP) - Get Report

and

Transocean

(RIG) - Get Report

.

She thought the situation, which is being compared to Exxon Valdez disaster, has been overblown. She said it's important to hear from RIG and find out the extent of its liability in the spill.

Gartman said one of the impacts of the spill will be the loss of fish meal for livestock. He said soybean meal will probably be used as a replacement. He also said the price of shrimp is going to go up throughout the world.

In the final trades, Seymour said to short

iShares MSCI Emerging Markets

(EEM) - Get Report

to $40.50. Adami liked

McDonald's

(MCD) - Get Report

. Finerman liked

Best Buy

(BBY) - Get Report

and Najarian liked

Procter and Gamble

(PG) - 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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