Stocks can move higher despite declining oil prices, said Jim Lebenthal, president of Lebenthal Asset Management, during CNBC's "Fast Money." But lower oil prices give the impression the economy is slowing, which is bad for energy stocks and the overall market.
Most of the stock market's moves can be attributed to speculation, said Joseph Terranova, chief market strategist for Virtus Investment Partners. For stocks to move substantially higher, investors need to regain some of their "speculation appetite."
Right now, stocks prices are tied to oil prices, agreed Mike Murphy, founder of Rosecliff Capital. Eventually that relationship is going to "decouple" and stocks will trade on fundamentals, which is good given the recent earnings reports.
Stephanie Link, chief investment officer of TheStreet and co-manager of the Action Alerts PLUS portfolio, said despite good earnings market volatility is likely given that economic data from Europe and China aren't too strong.
Historically, high energy prices have been bad for the stock market and low energy prices have been good for stocks, according to Matt McLennan, portfolio manager at First Eagle Funds. Investors should use a long-term time horizon when it comes to purchasing energy stocks.
"We're just waiting for the 'lower for longer' phenomenon to end," Bruce Van Saun, CEO of Citizens Financial Group (CFG) - Get Citizens Financial Group, Inc. Report , said about interest rates. It's good for consumers and corporations looking to refinance but it decreases margins for the banks. Demand for auto and student loans has been strong, he added.
Merck (MRK) - Get Merck & Co., Inc. (MRK) Report was the first stock on the show's "Trader Blitz" segment. "The quarter was fine," Link said, despite lower guidance and net income. However, investors should wait for a larger pullback before getting long.
Shares of Sarepta Therapeutics (SRPT) - Get Sarepta Therapeutics, Inc. Report are down over 30% after the company delayed a filing on a muscular dystrophy drug. Because of this type of volatility, Terranova said investors who want exposure to biotech should do so via the SPDR Biotech ETF (XBI) - Get SPDR S&P BIOTECH ETF Report .
"If you like Nike, you have to like Foot Locker (FL) - Get Foot Locker, Inc. Report ," Link argued, with 68% Nike's revenue coming from Foot Locker. Foot Locker is cheap and is a restructuring story. Terranova said he likes Under Armour as well as Apple (AAPL) - Get Apple Inc. (AAPL) Report , United Parcel Service (UPS) - Get United Parcel Service, Inc. Class B Report and FedEx (FDX) - Get FedEx Corporation Report .
Because there is job growth but little wage inflation, Lebenthal said consumer products such as shoes and sports equipment will sell better during the holidays than items such as high-end jewelry.
For their final trades, Terranova is buying Teva Pharmaceutical (TEVA) - Get Teva Pharmaceutical Industries Limited Sponsored ADR Report and Lebenthal is a buyer of Marathon Petroleum (MPC) - Get Marathon Petroleum Corporation (MPC) Report . Murphy said to buy Blackstone (BX) - Get Blackstone Group Inc. Class A Report and Link is buying Plum Creek Timber (PCL) .
-- Written by Bret Kenwell