The markets closed on a sour note Friday as the wave of bad economic and banking news continued.
Dow Jones Industrial Average
fell 119.15, or 1.66%, to 7,062.93, while the
fell 17.74, or 2.36%, to 735.09. The
lost 13.63, or 0.98%, to 1,377.84.
Dylan Ratigan, the moderator of
's "Fast Money" TV show, said the markets actually showed some resiliency despite a 12-year low for the U.S. stock market, the worst GDP numbers since 1982,
first dividend cut since 1940, and the Obama administration's complete overhaul of the tax code.
Pete Najarian said it's "amazing we're down 100 points" considering all the negative news thrown at the markets.
Ratigan moved on to one of the major stories of the day: the deal between the U.S. government and
in which the government will convert $25 billion of its preferred shares in Citigroup into common shares and a 36% stake in the company.
Karen Finerman called the move a "home run" for preferred share holders because the market "was discounting something much worst." "The common got crushed while the preferred was up huge," she said.
Joe Terranova said an alternative strategy would be to invest in
. He said these trades work because capital markets is where investors want to put their money.
Jeff Macke said the Citigroup swap was done to avoid a downgrade of the common by credit rating agencies.
Ratigan asked Finerman what she thought of GE's dividend cut. She said it was the "smartest" thing GE could have done. She said there many other better uses for the $9 billion saved by the cut.
Ratigan noted that the tech names continue to fare well. Terranova said he bought
today because the bar has been set so low with all the pessimism surrounding the company's performance. "Dell could easily get to $11 to $12," he said.
He said the stock is so "massively" shorted that it would just take someone to cover that trade to send the stock up.
Najarian disagreed, saying he doesn't see any growth in Dell.
Terranova also had some positive comments about gold and energy stocks. He said once gold got down to its current support level of $920 to $930, it took off. He said the energy complex is starting to come together, with gasoline bottoming in January and natural gas moving higher after hitting a six-year low this morning.
Najarian said there's still strong market action in ag stocks, including
, which he said experienced an "unbelievable" volume of 85,000 calls today.
Sean Egan, managing director of Egan-Jones Ratings, joined the panel to talk about the state of credit in the country. Egan said credit conditions are poor but will get better, as the Treasury Department and
figure out how to get credit flowing again.
Asked which of the 19 banks will pass the stress test, he said most of them are not going to meet it and will need some support from the federal government.
He said he expects
Bank of America
will get some government support and that its CEO, Ken Lewis, will be replaced in the next six to 12 months.
He disagreed with the idea of banks returning TARP money. He said they should get cash from whatever source for their capital cushion.
Daryl Byrd, president and CEO of
, said his bank decided to return its TARP funds because the "rules are changing" and its concern that keeping it would put it at a competitive disadvantage.
He said there are significant strings attached to the TARP funds and "they seem to be growing every day."
Ratigan shifted to the topic of ETFs and whether there may be a boom in the trading of those securities. Nearly a quarter of investors at
use ETFs as a primary trading vehicle.
Jeff Macke told viewers to tread carefully in this area, noting they are not something you buy and hold. He said there should be much tighter regulation of those who issue these securities.
Jonathan Bush, CEO of
, said Obama's ambitious health care plans should benefit his company despite a 22% plunge in the stock today.
He said he didn't understand what that was about, adding his company, whose software organizes medical records, is positioned for an "unbelievable" future.
In the final trades, Macke was for
; Terranova for
; Finerman for
; and Najarian for
"'Fast Money'Portfolios of the Week" on Stockpickr every Thursday.