'Fast Money' Recap: Slippery Oil
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 |
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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
.