The Federal Reserve slashed rates by 50 basis points on Wednesday, bringing the fed funds rate to 3%. The Dow was up triple digits intraday, but closed the trading session down 37 points. The Nasdaq finished down 9 points and the S&P 500 closed down 6 points.
Water was thrown on the post-Fed rally after Fitch Ratings downgraded
Guy Adami told investors to buy bank stocks like
on any dips.
3 Stocks I Saw On TV
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Pete Najarian mentioned he bought a downside put and sold an upside call on the
Financial Select Sector SPDR
Wednesday. Jeff Macke hopes the Fed will just go away for a while and let the market work.
fell 1% after hours as the coffee giant lowered its profit forecast. Macke likes the job CEO Howard Schultz is doing, and he would buy the stock at $18. Adami likes
for a buy around $50.
fourth-quarter profits soared, but shares fell 11% after hours on margin concerns. Macke explained that the numbers were better than so-so, but in this market everything is being taken down.
and the government are in talks to explore a settlement over the marketing of Zyprexa. Najarian explained that LLY made a ton of money off Zyprexa, and the firm will likely continue to fight for a settlement. He would continue to avoid the big pharma names because of the negative press surrounding many of the firms. Adami likes
valuation and he would be a buyer.
Google Earnings Trade
is set to report earnings Thursday after the market close. What is the trade? Adami explained that this is the first quarter that Wall Street firms have downgraded the stock ahead of the earnings report.
He believes the stock is setting up as a technical trade to the long side, but it could drop 50 to 75 points if Google says anything bad. Macke says he doesn't like the tape here nor Google. He explained that no matter what Google says, it will probably go down. Najarian says Google could surprise Wall Street, and he likes the stock ahead of the report. He says the best way to play Google is to put on a call options spread.
A dividend increase doesn't always mean that the financial standing of a company is in great shape. Finerman highlighted four companies that raised their dividend and then went down big after the hike. MBIA hiked then went down 78%, Ambac fell 86%,
fell 89% and
New Century Financial
fell 99%. Finerman says the dividend increase from
doesn't mean much. She disclosed she is staying short LEH with put options. Adami was very skeptical of the timing of the Lehman dividend increase and stock-buyback announcement in front of the Fed meeting.
The "Fast Money" crew was joined by Jason Pestricelli of TD Ameritrade and Dennis Gartman, founder of The Gartman Letter. Pestricelli explained that the S&P 500 futures were moving down in after-hours trading on heavy volume. He says this indicates that Thursday's open will be lower for the stock market.
According to Gartman, the Fed has given up completely on fighting inflation with Wednesday's rate cut and is only concerned about fighting weakness in the economy. He feels that the Fed's actions are terribly bearish for stocks going forward. Gartman disclosed he is long gold, long
and short high-tech names like Amazon.com and Google. He also mentioned he likes natural gas here and he is short crude oil. Adami likes natural gas play
Pops and Drops
traded up 10%.
traded up 2%. Macke explained that during a recession, it's not a great time to be long DIS.
traded up 4%.
Najarian says U.S. sales are strong for HMC.
traded up 11%. Macke says take your profits; this stock is last year's fad.
traded up 2%. Adami thinks BA has a cheap valuation and the stock is a long-term hold.
traded up 6%. Finerman likes the stock, and she disclosed she is long and hanging on to it through earnings.
traded down 3%. Adami says margins are lousy at EK, and investors should avoid the stock.
both fell 2%. Finerman says take some profits; these stocks have had a huge run.
plunged 14%. Najarian explained that if the U.S. economy is slowing, then people will cut back on straightening their teeth.
traded almost five times its average daily volume Wednesday.
Macke would sell the
Thursday. Adami favors
Public Service Enterprise Group
. Finerman recommends
. Najarian likes E*Trade Financial for a trade Thursday.
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