NEW YORK (
) -- The
Dow Jones Industrial Average
ended down 43, or 0.4%, at 11,126 on Wednesday, after bouncing more than 100 off the day's low of 11,020. The
lost 3, or 0.3%, to finish at 1182.
was the only one that ended up in positive territory, adding 6 points, or 0.3%, to finish at 2503.
The trading panel on
"Fast Money" TV kicked off the show by discussing an SEC filing by
in which it said its gross margins in the first quarter of 2011 will be down from 2010 levels. Melissa Lee,, the show's host, asked if "perfection is now taken off the table" for Apple stock.
For a breakout of some stocks from a recent "Fast Money" TV show, check out Dan Fitzpatrick's "3 Stocks I Saw on TV."
3 Stocks I Saw on TV
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Pete Najarian said he was expecting this news and that the company will have great numbers in the next product cycle. Still, he cautioned that Apple must have production levels in line with demand.
Karen Finerman said gross margins are only part of story, given that operating margins have been "fat." She believes Apple can still have very big earnings. She said Apple hasn't been priced to perfection like stocks such as
. She said she would be a buyer of Apple if it broke below $300.
Reacting to the SEC filing, Joe Terranova said a downtick in Apple prices gives people a chance to buy Apple if they haven't yet. "A lot of folks don't own it and want to own it," he said. Despite the news, Terranova doesn't believe that the upward trajectory of Apple has changed.
Anthony Scaramucci, founder and managing partner of Skybridge Capital and a guest on the show, said Apple's gross margins will go up once the company comes out with new products. "They've got cash to deploy."
After examining Apple's SEC filing,
tech correspondent Jon Fortt said the company conveyed that that the iPhone will counterbalance its lower-margin iPad product and urged investors to put "the margin stuff in perspective."
In that vein, Fortt noted that first quarter 2011 margins will still be higher than those several years ago. Furthermore, once the company catches up with supplies for the iPhone4, margins will be pushed back up again, he said. "I wouldn't take this margin news too rough," he said.
Fortt also noted several possible positive developments for the company, including the possibility that Apple could take up
as an additional carrier, which should expand their distribution further. He also noted that the Mac App Store is arriving by the end of January, that software tends to have higher margins and that iPads will have native Verizon wireless technology built in.
Gleacher & Company analyst Brian Marshall said he agreed with Fortt's comments, adding he had been expecting gross margins to decline at Apple. "Nothing's new here."
However, he doesn't see a tremendous fall off in gross margins. His price target for the company is $355, while baking in gross margin declines for the next couple of years.
Lee noted that
stock was creeping up after the company reported strong earnings results.
On that note, Najarian said that tech companies that are well-tied to the mobile space such as
, Broadcom and
continue to grow. "Each name is a different aspect of data delivery."
On the topic of cloud computing, Terranova added that "everyone's" trying to buy
Lee said that "fear" was "creeping" back to markets and that the market was clearly on "pins and needles" while it awaited more direction from the
Raymond James strategist Jeffrey Saut, a guest on the show, said he sees the market pulling back 5 to 8 percent in the short term, which is "not much," in his opinion. Looking ahead, he said he thinks the Republicans will retake the house, but maybe not the Senate -- though it will be a close race. He also expects a less-than-expected quantitative easing announcement from the Fed Reserve.
Scaramucci agreed with Saut's thoughts. At the same time, he added that markets have rallied on the Republicans retaking power and massive QE2 economic stimulus, but have "seen enough of that." From here on in, he said, fundamental progress and fundamental earnings strength would be needed for real growth to occur.
In light of all this, Lee noted that multi-billion dollar hedge fund manager Paul Tudor Jones currently favors gold, copper and 10-year notes. "I think it's much more about protection right now," Najarian said. "Earnings season was very powerful ... sold off on good news. I think people are buying protection."
On Thursday Van Eck Global is set to launch a rare earth/strategic metals ETF. Jan van Eck, as principal at Van Eck Global appeared as a guest on the show. He said that ETF would have a market cap of about $25 billion, consisting of small- and mid- cap companies with financing and exploration risks. He expects it be a very volatile ETF.
"The good news is that they're all pure play stocks" with more than 50% revenue exposure to rare earth metals he said. He expects strong demand for rare earth metals, given the popularity of iPods and BlackBerrys, which all need rare earth metals.
Brian Kelly of Kanundrum, who continues to hold onto
but doesn't plan on buying more of it, said he likes the strategic part of the ETF but would rather be in the rare earth stocks themselves.
As the show progressed, Lee noted that
reported favorable quarterly earnings results. Meanwhile,
reporter Brian Shactman said the company could be passing on prices to consumers given that cotton prices have been higher. Terranova added that cotton prices will be higher for the next 12 to 18 months and Hanes "must past on prices."
Later, Najarian said that
Las Vegas Sands
had "incredible earnings," but he wouldn't jump in until there was a pullback first.
The trading panel shifted their attention to
Barnes & Noble's
new Nook. Lee wanted to know if the Nook would offset the company's college textbook business problems.
Finerman said while the new Nook looked like a decent product good for kids -- it has color and some movement, it doesn't solve the company's "shrinking" bricks and mortar business.
Plus, the company's tied in third place in e-reader space, she noted. "To make a transformation into a tech device company would be impossible." Finerman thinks the company's college textbook business will get increasingly worse and said it was a "bad deal to buy the text book company."
Shifting the focus to
, UBS analyst Brent Thrill said he thinks the stock's valuation is "very cheap" and that its higher margin office and services business will offset the decline in the client business. "Yes, there's some weakness in consumer, but enterprise will pull them through. We still think it's cheap."
He acknowledged that the company is still way behind in tablet PCs, however. Scaramucci said Microsoft is "cheap, but not a culture of innovation." Terranova said he would not short the stock, but wanted to know whether the company intended on becoming a growth company. "If not," the company, he said, should focus on dividends.
In the final trades, Kelly said it was a "great time" to buy
Market Vectors Junior Gold Miners ETF
and Terranova said he liked
. Scaramucci liked
, while Finerman liked
. Najarian liked
Written by Andrea Tse in New York City
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