'Fast Money' Recap: Slippery Oil

The trading panel says the effects of pricey oil are showing up in stock drops.
By Mike Taylor ,

The U.S. stock market gave up an early market surge Monday. The Dow finished up 0.3%, the S&P 500 was up 0.1%, and the Nasdaq gave up 0.5%. Sandisk (SNDK) made bearish comments toward the end of the day, which helped prompt the selloff.

Pete Najarian said that he is concerned about the impact of high oil prices on the overall economy. He pointed out that airline stocks got "decimated," and volatility in the market spiked today.

Jeff Macke said the market was looking for an excuse to roll over today. He said the action was fairly typical of Monday summer options expiration.

Karen Finerman said that if it's true that oil prices are affecting demand in the economy, she believes the price of oil will go down.

Najarian said he thinks oil will roll over at some point because consumers will eventually be hurt by $4 a gallon for gasoline. He said that when the government's stimulus checks run out, it will be harder for the consumer to continue to spend.

Guy Adami said he believes oil will roll over. He pointed out that the transportation sector performed very well today despite historic oil prices. He said that a second-half recovery and pricing power will continue to help the transportation stocks.

3 Stocks I Saw on TV

var config = new Array(); config<BRACKET>"videoId"</BRACKET> = 1562780270; config<BRACKET>"playerTag"</BRACKET> = "TSCM Embedded Video Player"; config<BRACKET>"autoStart"</BRACKET> = false; config<BRACKET>"preloadBackColor"</BRACKET> = "#FFFFFF"; config<BRACKET>"useOverlayMenu"</BRACKET> = "false"; config<BRACKET>"width"</BRACKET> = 265; config<BRACKET>"height"</BRACKET> = 255; config<BRACKET>"playerId"</BRACKET> = 1243645856; createExperience(config, 8);

Macke pointed out that the S&P 500 has run into its 200-day moving average, a previous resistance level. He said this is a chance to get long the market.

Safety First

Najarian said that if investors buy transport stocks, they should buy puts to protect themselves from potential downside. He suggested

Burlington Northern Santa Fe

( BNI). He said

Norfolk Southern

(NSC) - Get Report

is the cheapest in the space, with a price-to-earnings ratio of 17. Demand from the coal and agriculture sector for transportation is real, he said.

Adami suggested viewers check out

Wabtec

(WAB) - Get Report

. He said the brake maker wouldn't have bought another company unless it believed the uptrend in transport would continue.

Merger Scorecard

Microsoft

(MSFT) - Get Report

proposed a partial takeover of

Yahoo!

( ERTS) today. Finerman said this is a bad deal for Yahoo!.

Macke said that Microsoft is suggesting that Yahoo! sell all the good parts of its business, and Microsoft will let it keep the bad parts. He said he likes the odds of a deal between Microsoft and Yahoo! more than those of

Electronic Arts'

( ERTS) acquisition of

Take-Two

(TTWO) - Get Report

.

Finerman said she likes the Electronic Arts deal better, saying it will probably close more quickly than the Microsoft-Yahoo! deal.

Najarian said that a recent deal that makes the most sense is

Hewlett-Packard's

(HPQ) - Get Report

acquisition of

EDS

(EDS)

. He observed that H-P shares are already back where they were when the company announced the deal.

The Shipping News

DryShips

(DRYS) - Get Report

had a tough day today. Najarian said that the company is a spot-rate shipper, meaning its prices can change, and right now the company is getting more money per day for its services. He said

Excel Maritime

(EXM)

reported good earnings today. He said as long as these companies have pricing in their favor, their stocks are cheap.

From a trading perspective, Adami said investors should wait for DryShips to pull back a little bit. Macke also pointed out that

Genco

(GNK) - Get Report

is offering secondary shares. He said that when insiders are selling, investors should be cautious.

Big-Box Blues

Lowe's

(LOW) - Get Report

reported disappointing earnings today and shares fell. Finerman said that she predicts a similar decrease in same-store sales from

Home Depot

(HD) - Get Report

. She said she owns Home Depot stock and puts.

Adami said investors should hope

Home Depot

(HD) - Get Report

misses tomorrow so they can get long on a dip. He said Home Depot and

Wal-Mart

(WMT) - Get Report

win on the government stimulus checks.

Raining on Disney's Parade

Disney

(DIS) - Get Report

suffered an analyst downgrade today. Richard Greenfield, media analyst at Pali Research, joined the show to discuss his feelings on the entertainment company.

Greenfield said Disney's theme parks have done well despite a weak U.S. consumer. He said he's interested in what happens next. He pointed out that

Prince Caspian

underperformed at the box office. He said the upcoming film

Wall-E

will be a swing factor for the stock and recommended waiting for the end of the summer before making a decision about Disney shares.

Shorts for the Sun

Solarfun

( SOLF) shares spiked today. Finerman said she tried to short the name today, but there weren't enough shares available. She said there's a huge short interest in Solarfun.

High Tech

The traders wondered whether Wall Street has been late to the game in upgrading the technology sector. Adami pointed to a story in

Barron's

about

Oracle

(ORCL) - Get Report

, saying everyone's warming up to tech. He said a lot of commentators are late to the party.

He said shares of

Intel

(INTC) - Get Report

,

Cisco

(CSCO) - Get Report

and

IBM

(IBM) - Get Report

have already moved, and he wouldn't plow into tech here. He also said it's time to take profits in

Western Digital

(WDC) - Get Report

. Macke and Finerman agreed.

Najarian said it's wise to stick with laggards in this environment. He recommended

EMC

(EMC)

. He also said Microsoft is undervalued at these levels.

Break Out the Corning

The traders then discussed potential breakout stocks with technical analyst Quint Tatro. He said

Corning

(GLW) - Get Report

,

Terra Nitrogen

(TNH)

and

Coinstar

(CSTR) - Get Report

are all ready to move higher.

Macke said he is surprised by the breakout in Coinstar, and he would look into the name. Adami said he likes Corning, but would wait for a pullback. Finerman said she doesn't like Coinstar because the company isn't using shareholder money productively.

The traders then discussed whether the video-games trade is over. It is, Macke said. He pointed out that

GameStop

(GME) - Get Report

is rolling over.

Electronic Arts

( ERTS) is a flat-out short here.

Trader Radar

Campbell Soup

(CPB) - Get Report

traded on a great deal of volume today.

The "Fast Money" bunch then discussed possible plays on summer beach vacations. Macke suggested Wal-Mart and

Costco

(COST) - Get Report

because that's where consumers are going to go to load up on beach supplies.

Najarian said that

Pool Corp.

(POOL) - Get Report

could be a buy, if investors believe the housing market is coming back. He said he likes the name.

Finerman recommended

Allergan

(AGN) - Get Report

.

Adami suggested

Quicksilver

(ZQK)

. He said the stock bottomed on Jan. 16 and has good international sales.

The traders then spoke with Tim Seymour about emerging markets. He said they are continuing to hold steady. He said he likes the market but would buy put protection on stocks in the sector. He said he likes

Cemex

(CX) - Get Report

,

Mobile Telesystems

(MBT) - Get Report

and

America Movil

(AMX) - Get Report

.

Fast Messages

One viewer asked whether Disney will benefit from the weak dollar. Yes, said Macke. He said he continues to believe the company will outperform.

Another viewer asked what companies will benefit from Boone Pickens' wind-farm initiatives. Najarian recommended

American Superconductor

(AMSC) - Get Report

.

Final Trade

Macke said to sell Electronic Arts. Adami picked

Boeing

(BA) - Get Report

. Finerman said to short the

CurrencyShares British Pound Sterling

(FXB) - Get Report

. Najarian chose

DuPont

(DD) - Get Report

.

Loading ...