Federal Reserve Chairman Ben Bernanke's bearish testimony before Congress and a Moody's downgrade of bond insurer FGIC brought the bears out to play Thursday. The Dow fell 1.4%, the S&P 500 lost 1.3%, and the Nasdaq sloughed off 1.7%.
"Fast Money," the crew discussed the role of a dismal performance from the financials in the down market. Pete Najarian remarked that the financial stocks never participated in the recent up days.
( LEH), along with
Fortress Investment Group
, looked awful today, he added.
Guy Adami said it appeared that investors are skeptical that the financials will recover in 2008. He noted Goldman Sachs' downgrade of
. Jeff Macke blamed the bad day on volatility, saying that in this environment, any move will be big, whether up or down.
Najarian said both Goldman and
are in trouble. Karen Finerman said Goldman is the premiere franchise in the sector. She sees it as a good investment to the long side.
Chart of the Day
Goldman underperformed the
Financial Sector SPDR ETF
. Adami said it was down to attractive levels, but investors should wait for the May 13 report. Najarian speculated that the company would have big write-offs. He said he believes Goldman faces $10 to the downside.
Sifting Thourgh the 13-F's
Securities and Exchange Commision
filings, big money managers today disclosed some of the moves they made.
Chairman Eddie Lampert sold his position in Citigroup. Finerman, Adami and Macke agreed he had taken a loss. Macke lauded Lampert for quitting when he was behind.
( BRKA) CEO Warren Buffett took a stake in
and added to positions in
. Adami liked the Glaxo play, but said it was a trade for an 18-month window, not a fast-money move.
Noted short-seller of the bond insurers Bill Ackman sold some of his position in
and added to Sears,
Barnes & Noble
. Finerman said Sears was interesting to her for the long term.
Riding the Railroads
The sector has enjoyed strong movement lately. Adami noticed that Bear Stearns raised price targets on
Burlington Northern Santa Fe
Canadian National Railway
. He reminded viewers to check out
Najarian hypothesized that the upgrades had come on the heels of the BB&T Transportation conference. He said the action in rails and truckers marks a turn in the economy.
Najarian discussed the put activity on
. He guessed that it was speculation, adding that the activity likely was based on some inside information.
Macke talked about the beating
took on a weak forecast, saying that with input costs rising, casual dining is not the place to be.
The Beauty Trade
In honor of Valentine's Day, Finerman put together several beauty stocks. She recommended
Procter & Gamble
. Adami expressed interest in Estee Lauder for its international sales.
The crew called up Nick Pinchuk, CEO of
, to talk about the stock's amazing run. Pinchuk attributed the success to a great brand and an increasing tendency among consumers to repair their vehicles instead of buy new ones. Adami liked the repair story.
Stocks of Love, Stocks of Scorn
In another Valentine's bit, each trader picked two stocks -- one that they love, and one that they scorn. Finerman disclosed her crush on
because it continually beats and raises guidance. She scorned one of her first loves,
Adami said he loved
. Macke stuck with McDonald's, and spurned
. Najarian told of his love for
and his heartbreak over
In the last installment of Najarian's "Commander Planet" bit, he discussed solar energy. He noted the massive stock increase in
. He reminded viewers that solar energy is very expensive and represents a tiny fraction of the global energy market. He noted that few solar companies turn a profit and that silicon is very expensive.
Adami said investors could take a flyer on
( ESLR). Macke added that business was very good at
One viewer asked Najarian about large call volume on
. He replied that the play was speculative. Macke reminded viewers that the company has been a perennial buyout name.
A second viewer asked Finerman about
. She is long Crocs options and stock, and is expecting strong earnings next week.
Short Dow30 ProShares
. Adami is into the
( XTO) secondary offering. Finerman believes in
. Najarian is stoked on Burlington Northern Santa Fe.
Pops and Drops
jumped 3%. Najarian said the Internet advertising space is attractive.
rose 7%. Adami advised taking profits.
leapt 10%. Macke said to sell the car rentals.
( LIZ) fell 18%. Finerman said it doesn't look good for the company.
slipped 1%. Adami said it's having trouble digesting its
( TT) acquisition.
went down 10%. Macke stressed that investors should sell apparel stocks.
plummeted 20%. Finerman said she doesn't like to buy a stock when it falls that much.
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