'Fast Money' Recap: Cisco Soars - TheStreet

'Fast Money' Recap: Cisco Soars

The trading panel was impressed with the after-hours price action on Cisco after it released its earnings.
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NEW YORK (

TheStreet

) -- Shares of

Cisco

's

(CSCO) - Get Report

rose sharply in after-hours trading Wednesday on a strong earnings report and outlook.

The regular trading session was mixed. The

Dow Jones Industrial Average

fell 26.30, or 0.26%, to 10,270.55 and the

S&P 500

dropped 6.04, or 0.55%, to 1,097.28. The

Nasdaq

eked out a gain of 0.85, or 0.04%, to 2,190.91.

Pete Najarian said on

CNBC

's "Fast Money" TV show the strong numbers in every metric in Cisco's earnings demonstrates it's a "growth company again with potential for greater growth ahead." He was especially encouraged about the company's positive comments about the corporate spending market.

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 onTV

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Guy Adami said Cisco, which was up 4% in after-hours trading, reported a great quarter and is probably at a valuation level where investors can own it. He said Cisco's earnings were really not that much better than those of

IBM

(IBM) - Get Report

and

Microsoft

(MSFT) - Get Report

except that its stock was rising after a selloff.

Gary Kaminsky said Cisco's earnings is different from its peers because it's the first large-cap tech company to open up higher after great numbers and continue to trade higher. By contrast, he said its peers sold off after favorable reports as a result of profit taking.

Melissa Lee, the moderator of the show, said that CEO John Chambers said that the gains were across the board in the company's business model and geographically around the world.

Jim Goldman, who was sitting in on Cisco's conference call, said he had never heard Chambers used such strong language about the company's performance and outlook. He said Chambers was using words like "major improvements" and "significant acceleration" and "a dramatic recovery."

Adami said

IBM

(IBM) - Get Report

, which was trading above $125, was another name to consider if "you are bullish in the broader market."

Najarian said Cisco should boost

Juniper Networks

(JNPR) - Get Report

,

Broadcom

(BRCM)

and chip stocks.

Commenting on the broader market, Lee said the commodity names were getting crushed, especially copper. Terranova said copper broke below $3 and advised viewers not to lose sight of where oil may go. "It's the best trade out there" in the commodity space, he said.

Najarian said one opportunity in the commodities might be in

US Steel

(X) - Get Report

, which he said may be due for a bounce judging from today's option activity. Adami called

Freeport McMoRan

(FCX) - Get Report

broken technically and advised selling it into rallies. Terranova said there may be an opportunity to go long Freeport if it dips to the mid-$60s.

Bull Market or BS? Dennis Gartman, of the Gartman Letter, said he thinks a lot of damage has been done to the metal stocks, including

US Steel

(X) - Get Report

and Freeport McMoRan, both of which he called "broken."

He said the most important stocks that are tied to the production of autos and refrigerators are broken. He said the stronger dollar has been putting selling pressure on the commodities. As a result, he said he is selling stocks that are dependent on higher commodity prices and buying stocks that are dependent on lower commodity prices.

On another point, he said he's a seller of

Goldman Sachs

(GS) - Get Report

and a buyer of

General Electric

(GE) - Get Report

. He also said he would buy

Suncor

(SU) - Get Report

and sell crude against it.

Lee invited Eric Dinallo, candidate for New York attorney general, to comment on an editorial he wrote for the

Wall Street Journal

on the controversy over

AIG

(AIG) - Get Report

bonuses.

Dinallo told Lee that it would be legally difficult to deny the bonuses to the AIG employees. He said any effort would run into questions about the legality of the contracts and the difficulties distinguishing between the people who were trying to runwind the book and those who put the book in place.

He said former

Fed

chief Paul Volcker has taken a good first step in dealing with proprietary trading problems but that much more needs to be done. He said the problem stems from the Commodities Futures Modernization Act, which caused derivatives to unregulated, and grew worst when AIG was allowed to shop around for its regulator.

Kaminsky said he didn't have much faith in Congress in coming through with new regulations because "they don't understand the capital markets."

Shifting to the prop desk, Todd Gordon, of Forex.com, said Cisco would have to move above $24 to "keep this thing going." He also said

Akamai

(AKAM) - Get Report

looks from the charts like it is heading downward.

Kaminsky maintained the best tech infrastructure play remains

American Tower

(AMT) - Get Report

.

Lee said

Toyota

(TM) - Get Report

is in a world of trouble, down 5% today after being down 12% last week. Terranova sounded a cautionary note about trading in the stock: "It incurs way too much risk." Adami said the better auto company to be in is

Ford

(F) - Get Report

.

Lee noted that the short interest in Ford has doubled, prompting Terranova to say that those shorts will be squeezed.

Lee brought in Paul Latta, director of research for McAdams, Wright & Ragen, which was named best stock picker in 2009 by

Barrons

. Latta said he considers

Amazon.com

(AMZN) - Get Report

a buy. He said the death of the Kindle has been exaggerated and that the bulk of its business is still stealing business from the brick and mortar. He also liked

Verizon

(VZ) - Get Report

.

Lee asked Kaminsky for his best short pick. His pick was

Lululemon

(LULU) - Get Report

, which he called a stock that is priced for perfection. He said the company won't be able to follow through with whatever success it enjoys from sales in the winter Olympics.

In the final trades, Terranova liked

Oil Services HOLDRs

(OIH) - Get Report

. Adami was for

McDonald's

(MCD) - Get Report

while Kaminsky liked

Walgreen

(WAG)

; and Najarian liked

Yum! Brands

(YUM) - Get Report

.

-- Written by David Tong in San Francisco

To watch replays of Cramer's video segments, visit the Mad Money page onCNBC

.

"Check out

"'Fast Money'Portfolios of the Week" on Stockpickr every Thursday.

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