'Fast Money' Recap: Rally Worries

Some members of the trading panel questioned whether the rally could be sustained.
By David Tong ,

NEW YORK (

TheStreet

) -- The markets rebounded Monday from a dismal January on strong manufacturing data.

The

Dow Jones Industrial Average

jumped 118.65, or 1.85%, to 10,185.98 while the

S&P 500

added 15.30, or 1.42%, to 1,089.17. The

Nasdaq

rose 23.85, or 1.11%, to 2,171.20.

Joe Terranova said on

CNBC

's "Fast Money" TV show that he participated in today's rally, specifically buying financials because of their "low risk point of reference."

He particularly liked

JPMorgan Chase

(JPM) - Get Report

,

Bank of America

(BAC) - Get Report

and the

Financial SPDR ETF

(XLF) - Get Report

.

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 was in the opposite camp, saying he was in the "sell-the-rally" mood after the bad price actions of financials like JPMorgan. Pete Najarian said he was taking a wait-and-see approach to the XLF after expressing concerns about the price action of

Goldman Sachs

(GS) - Get Report

, which was up 3% today at the close.

Karen Finerman agreed with Terranova that JPMorgan is worth looking at. She said it's a great franchise that is oriented to the consumer.

Josh Rosner, managing director of Graham Fisher & Co., said the reason why the financials looked good today may be because the Volcker Plan may be operationally difficult to achieve. That said, he added he is still not very positive on many of the large banks because of the "problematic consumer exposure" that hasn't been dealt with.

Looking at the overall market, Najarian was nervous about whether the market could hold on to today's gains and move forward Tuesday. He said the market could very well turn negative.

Adami said the rail stocks have fallen to the point where they look interesting again. He particularly liked

CSX

's

(CSX) - Get Report

close today at $48.83 as an entry point to buy it.

Terranova said he was encouraged by Institute for Supply Management's reading of 58.4 in January. He also said China, despite reining in lending, is still growing.

Melissa Lee, the moderator of the show, noted that

Barnes & Noble

(BKS) - Get Report

jumped 20% in after-hours trading after Ron Burkle said his investment firm Yucapai had acquired 19 percent of the firm and noted in a regulatory filing that it would like to own 37 percent of the company.

Finerman said a good part of the jump is due to the move by Burkle to remove the company's poison pill. She said she would be "terrified" to be in the stock because she doesn't understand the book business these days. She and Adami also said the company is looking at a short squeeze. Adami said that could very well happen as early as Tuesday if volume kicks up to 11 million shares. Should that happen, he said he would short it.

Shifting to crude oil, Terranova liked

Exxon Mobil

's

(XOM) - Get Report

earnings today. He said believes oil is heading to $90 a barrel before it gets to $60, adding he likes names like

Oil Services HOLDRs

(OIH) - Get Report

and

Halliburton

(HAL) - Get Report

, but not

United States Oil

(USO) - Get Report

because of the contango effect.

Lee shifted to the news about a "street fight" between

Amazon.com

(AMZN) - Get Report

and

Apple

(AAPL) - Get Report

in the e-reader space. She said Amazon stands to losing pricing and negotiating power after it accepted revised prices from MacMillan publishing company that would raise charges from $9.99 to between $12.99 and $14.99 for a book in the Kindle e-reader book store.

Finerman said the deal will actually bring more money to Amazon, but she acknowledged the deal signifies a big change in the space. She said she frankly remains "scared" of Amazon because of its high valuation, although Adami said he believes the current price probably represents the first time in some time he would trade in the stock, which was down 5.21% to $118.87 today.

Najarian said investors should take things in perspective, arguing Amazon's e-reader business is only 5% of its business and the company is enjoying growth in other businesses.

Is the IPO market heating up? Lee said that more than $10 billion was raised in January. But Bob Pisani, a

CNBC

reporter, said the market could easily peter out. He said there were only seven IPOs in the U.S., including three involving Chinese companies, in January.

Of the upcoming IPOs, he singled out Ironwood Pharmaceuticals, an early stage research and development company; Friendfiner Networks; and what he called the most promising, Talsa, a big electric car company that wants to raise $100 million.

Shifting to the phrama- biotech sector, Najarian said

Cephalon

(CEPH)

looks like it's "clicking" after it spent $600 million to acquire a generics company. Adami thought

Amgen

(AMGN) - Get Report

was reasonably priced, and he liked

Celgene

(CELG) - Get Report

.

Lee brought in Mike Khouw, an options trader with Cantor Fitzgerald, with an idea for the gold trade. Khouw said the an options trade in

Market Vectors: Gold Miners

(GDX) - Get Report

was cheaper than one in that in

SPDR Gold

(GLD) - Get Report

.

Gary Kaminsky, former managing director for Neuberger Berman, squashed a London Times story that reported that the CEO of

Goldman Sachs

(GS) - Get Report

is in for a $100 million payday. "It's a dumb story," he said.

Rather he said the focus should be on what money the company will do with what it doesn't spend on compensation. He believes the company will find some way to use it reward shareholders.

In the final trades, Terranova liked

Dell

(DELL) - Get Report

. Adami was for

Akamai

(WAG)

while Finerman liked

Boston Scientific

(BSX) - Get Report

; and Najarian reiterated his preference for Cephalon.

-- 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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