'Fast Money' Recap: Financials Hurting

Credit problems and concerns with subprime continue to hurt the financial stocks.

Author:: Stockpickr Staff
Publish date:: Feb 4, 2008 9:06 PM EST

Stocks weren't in favor with investors Monday, as recession fears continue to worry the markets. The Dow lost 108 points and the Nasdaq fell 30 points.

CNBC's

"Fast Money," Jeff Macke explained that investors didn't have many reasons to buy stocks Monday. Pete Najarian says this market is still a trader's market. Karen Finerman says that credit issues are still a problem, and that she is staying short

Capitol One

(COF) - Get Report

. Tim Seymour says emerging markets have better valuations, and investors are flocking to the overseas trade.

Credit problems and concerns with subprime continue to hurt the financial stocks. Finerman mentioned that

Wachovia

(WB) - Get Report

and

Wells Fargo

(WFC) - Get Report

traded lower Monday off a Merrill Lynch downgrade. Also,

American Express

(AXP) - Get Report

, Capitol One, and

Discover

(DFS) - Get Report

traded down on a UBS downgrade. Najarian pointed out that

MasterCard

(MA) - Get Report

was strong in the tough environment for financials.

Google

(GOOG) - Get Report

accused

Microsoft

(MSFT) - Get Report

of trying to take control of the internet with its $44.6 billion bid for

Yahoo!

(YHOO)

. Macke says Google is complaining and the price action in their stock is weak. Najarian says a good earnings report from

Cisco Systems

(CSCO) - Get Report

could help the technology sector. He also likes

Apple

(AAPL) - Get Report

and he would avoid Google for a few more weeks. Seymour says he loves

Intel

(INTC) - Get Report

here.

Boston Scientific

(BSX) - Get Report

reported a fourth-quarter net loss of $458 million due to hefty losses on charges. Najarian mentioned that

Medtronic's

(MDT) - Get Report

drug-coated stents will hurt BSX.

Las Vegas Sands

(LVS) - Get Report

reported fourth-quarter profits that plunged 65% due to expansion costs. Finerman says the recession is hitting travelers, and she is short

Morgans Hotel

(MHGC)

. Macke mentioned that

Dollar Thrifty Automotive Group

(DTG)

fell 37% Monday after the rental car firm cut its 2007 earnings guidance.

Legendary real estate investor Sam Zell announced an 8% stake in

Starwood

(HOT)

. Najarian reminded viewers that Zell sold the real estate sector at the top, so you might want to pay attention to him buying HOT here.

Big pharma stocks like

Merck

(MRK) - Get Report

and

Eli Lilly

(LLY) - Get Report

were strong in a weak tape. Najarian says MRK has been oversold, and this could be the time to buy. He also likes

Sanofi-Aventis

(SNY) - Get Report

Earnings Trade

News Corp.

(NWS) - Get Report

Walt Disney

(DIS) - Get Report

and

Time Warner

(TWX)

are set to report earnings this week. What is the trade?

Macke explained he likes Disney because it always anticipates slower growth in the economy. He loves what CEO Bog Iger is doing by integrating the theme parks with the movie division. Seymour says he likes Disney for their ESPN brand that caters to adults.

Commodity Trade

BHP Billiton

(BHP) - Get Report

is set to report earnings on Wednesday. What is the trade? Seymour says that

Alcoa

(AA) - Get Report

and China's Chalco don't want to see BHP buyout

Rio Tinto

(RTP)

. He explained that this opposition to the takeover will help to raise the price for a potential bid for RIO, and consolidation will remain a theme for the entire sector. Seymour says

U.S. Steel

(X) - Get Report

and

Nucor

(NUE) - Get Report

are in play. He also likes

Market Vectors-Coal ETF

(KOL) - Get Report

for a way to play the coal sector. Finerman disclosed she is long Rio Tinto. Najarian says keep an eye on

Joy Global

(JOYG)

Arch Coal

(ACI) - Get Report

and

Alpha Natural Resources

(ANR)

Retail Trade

Retail stocks have been

en fuego

over the past couple of weeks, but some best of breed names like

Wal-Mart

(WMT) - Get Report

and

Target

(TGT) - Get Report

took a hit Monday. With January sales figures due out Thursday, is it time to take profits in the space?

Finerman explained that when a sector moves that sharply to the upside, investors must take some off the table. She would like to see the sector pull back more before she reloads. Macke says the retail stocks will be great trading vehicles for the entire year.

He recommends investors make a list of retail names they like and wait for them to come down. Seymour likes

Sears Holdings

(SHLD)

from a valuation perspective, and Macke says he would buy SHLD at a 9-handle. Finerman says she doesn't have a long SHLD position, but she wouldn't short it.

Egypt Trade

With 80 million people, Egypt is the most populous nation in the Middle East. The country is starting to see the flow of petrodollars into its economy. Egypt's economy is now growing at 7% annually and receiving a shot in the arm from growth in tourism.

Last year 10 million foreigners flocked there. What is the trade? Seymour says the trade is the

S&P Emerging Middle East & Africa SPDR

(GAF)

T. Rowe Price Tramx Mutual Fund

(TRAMX) - Get Report

Clorox CEO Interview

Clorox

(CLX) - Get Report

CEO Don Knauss joined the "Fast Money" crew to discuss his company's prospects. Knauss explained that he issued more cautious guidance Monday because the pressures of commodity costs are rising from $25 million to $100 million for the second half of the year.

He says their glad trash bags have the largest exposure to commodities costs of all their major brands. Knauss says Clorox is growing their top line ahead of Wall Street expectations, growing volume and running more efficient cost saving programs. Seymour disclosed he bought

Unilever

(UN) - Get Report

on Monday because they have big exposure to Eastern Europe. Finerman says she owns Wal-Mart which is her way to get exposure to firms like Clorox.