'Fast Money' Recap: Microsoft Muscle

Some of the crew see the software giant's quarter lifting the overall market Friday.
Author:
Publish date:

The stock market put in a second day in a row of solid gains on Thursday. The Dow finished up 108 points and the Nasdaq closed up 44 points.

According to Karen Finerman, speaking on

CNBC's

"Fast Money" show, the stock market is set to head higher. Tim Seymour thinks that hedge funds will push the market higher into the end of the month.

He believes the market has a lot of momentum and mentioned that a lot of fund mangers need to see the market go higher. Guy Adami said three strong earnings reports from railroad companies could be signaling that the economy isn't as weak as many think. Finerman disclosed she sold some

Valero

(VLO) - Get Report

on Thursday.

3 Stocks I Saw On TV

var config = new Array(); config<BRACKET>"videoId"</BRACKET> = 1388808493; 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);

Microsoft

(MSFT) - Get Report

reported a 79% rise in quarterly profits and raised its full-year profit outlook above Wall Street estimates. The stock traded up 5% after hours on the news. Najarian explained that Microsoft sold more than 100 million copies of its Vista operating system. Adami says $32 will be support and investors should look to buy MSFT on dips. Seymour thinks the strong report from MSFT will help lift the entire stock market Friday.

Amgen

(AMGN) - Get Report

beat analyst estimates for both sales and earnings but lowered its 2008 outlook. The shares traded up 4.5% after hours.

CNBC's

Mike Huckman explained that Amgen's anemia drugs sales didn't go down as much as expected. Also, Amgen put out positive data on its osteoporosis drug. Najarian thinks investors should hold off on Amgen.

Speculation hit Wall Street that billionaire Wilbur Ross is in talks to buy

Ambac

(ABK)

. Finerman wouldn't be surprised if Ross buys ABK. She wouldn't be short or long the bond insurers right now. Adami explained that the financial stocks now have the

Fed

on their side and he expects the banks to crush the numbers for the third quarter.

Multinational Stock Trades

Adami put together a basket of U.S. based multinational stocks that he thinks will continue to see growth even if the U.S. economy slows down. His basket was made up of names like

United Technologies

,

Hewlett-Packard

(HPQ) - Get Report

, Microsoft,

McDonald's

(MCD) - Get Report

,

Boeing

(BA) - Get Report

and

Honeywell

(HON) - Get Report

.

Adami thinks this basket will see strong performance throughout all of 2008. Seymour added

Alcoa

(AA) - Get Report

,

Intel

(INTC) - Get Report

,

Lockheed Martin

(LMT) - Get Report

and

Freeport-McMoRan

(FCX) - Get Report

to the basket. Najarian added

Tyco International

(TYC)

to the list. Finerman mentioned she likes Adami's picks.

China Trade

Is it time to turn to the east for a play on economic growth? What is the trade? Seymour says now is the time to start buying China. He feels China will not see a drop in exports if the U.S. goes into a recession. Najarian thinks the way to play China is with the agriculture names like

Mosaic

(MOS) - Get Report

,

Monsanto

(MON)

and

DuPont

(DD) - Get Report

. Finerman doesn't agree with Seymour's thesis, and she explained that if the U.S. slows down, it will affect China.

Energy Trade?

Joe Terranova, director of Trading at MBF Clearing, joined the "Fast Money" crew to discuss his take on oil. Terranova says the way to play oil heading into Memorial Day is to be long the refiner names like

Tesoro

(TSO)

and

Valero

(VLO) - Get Report

.

Seymour and Finerman agreed with Terranova on getting into the refiners. After Memorial Day, Terranova thinks the play is to be long natural gas and hold it through Labor Day. After Labor Day, he would return to oil for the fourth quarter. Najarian mentioned

ConocoPhillips

(COP) - Get Report

is worth a look.

Recession Trade

According to Dylan Ratigan, six months before a recession starts, the

S&P 500

will trade down only slightly, then during a recession it stays flat. But six months after a recession, it explodes 12% higher on average. Jon Najarian says if the U.S. is in a recession, investors will want to be long consumer staples, health care and material stocks. He explained that these sectors perform the best during a recession.

Najarian disclosed he is long

Merck

(MRK) - Get Report

,

Dow Chemical

(DOW) - Get Report

,

Monsanto

(MON)

and

Procter & Gamble

(PG) - Get Report

. He thinks these names will perform well even if the recession doesn't come to fruition. Adami mentioned that if the U.S. is already three months into the recession cycle, then names like Monsanto, Freeport-McMoRan and

Potash

(POT)

could trade much higher.

Trader Radar

Xerox

(XRX) - Get Report

caught the attention of traders Thursday after the stock traded almost double its average daily volume.

Pops and Drops

Pops

:

Capital One

(COF) - Get Report

traded up 8%. Seymour mentioned that the credit card firm said writedowns won't be as bad as last year. Potash traded up 8% after the firm reported profits that doubled due to strong demand from soybean, corn and wheat farmers. Adami called Potash an unbelievable company.

C.V.R.D.

(RIO) - Get Report

traded up 7%.

Western Digital

(WDC) - Get Report

traded up 8% after the disk maker reported a jump in second-quarter profits on strong revenue growth. Adami says a lot of good things are happening for WDC.

Drops

:

eBay

(EBAY) - Get Report

fell 6% after CEO Meg Whitman announced that she will be stepping down from the company. The online auctioneer also issued a first-quarter outlook that fell shy of Wall Street estimates. Najarian explained that when you forecast in this environment and it's not strong, the market will punish you.

Wal-Mart

(WMT) - Get Report

fell 3%. Finerman says she still likes the name.

Sunpower

(SPWR) - Get Report

fell 7% after the solar firm saw a 57% drop in fourth-quarter profits due to writing down debt. Seymour thinks right about here SPWR is starting to look interesting.

Solarfun

(SOLF)

fell 4%. Finerman says nothing is fun about Solarfun.

Face to Face

A viewer writes, "Would Pete Najarian be long the solar stocks?" Najarian says he hates the names right now and would wait for the rotation of money back into the sector before getting in.

Bob from Maine writes, "Lately I have seen my

Altria

(MO) - Get Report

stock go up in smoke. Are people becoming healthier and giving up their vices?" Finerman mentioned she likes MO here and she has been buying some the last few days. She would stick with it.

Jon from Michigan writes, "What's the trade on

Caterpillar

(CAT) - Get Report

going into earnings Friday?" Adami thinks CAT is cheap on valuation but he would wait and buy it in the low $60's.

Final Trade

Seymour favors refiners like

Tesoro

(TSO)

. Adami picked

Cisco Systems

(CSCO) - Get Report

. Finerman recommends

Goldman Sachs

(GS) - Get Report

Najarian says buy ConocoPhillips.

Stockpickr is a wholly owned subsidiary of TheStreet.com.