The markets rallied Tuesday with help from big Pharma and tech stocks.
Industrial Average rose 141.53, or 1.78%, to 8078.36, while the
added 13.07, or 1.58%, to 838.50. The
jumped 21.88, or 1.46%, to 1,516.30.
Dylan Ratigan, the moderator of
's "Fast Money" TV show, noted at the start a 7% plunge in shares of
in after-hours trading. The company badly missed revenue estimates in the first quarter by more than $1 billion.
Jeff Macke said Disney's problem is that it is selling resorts and movies in a difficult economy.
Ratigan said tech stocks continue to work. Jon Najarian said he's not seeing institutional buying in tech, although
earnings report on Wednesday could "turn them into bulls again."
Karen Finerman attributed the market's upside move to a Republican counter-proposal to the stimulus package in the Senate that would lower the corporate tax rate from 35% to 25%. She said that proposal might get some traction and represents a marginal improvement over the House-passed stimulus package.
Najarian agreed, saying the corporate tax cut is effective because it gets money quickly into the pockets of consumers and companies.
The market was also helped by better-than-expected results by big Pharma and biotech that drove up shares of
. Guy Adami quickly pointed out that
did exactly what it should have done.
Ratigan shifted the discussion to the bank bailout discussions in Washington and the possibility that the administration may separate good banks from bad ones.
Macke was critical of the move, saying it would be wrong for leave such a decision to "politicans."
Finerman, though, said separating out the good banks could turn out well if private capital is brought in to help the surviving banks to become strong.
Najarian said the process could lead foreign banks to purchase the bad banks after the toxic assets are removed.
Finerman said, however, that some potential buyers might back off if there isn't not enough clarity on the nature of the assets and their worth. Another hurdle she mentioned is the need for the prospective buyer to register as a bank holding company if the purchased assets exceed legal limits.
Ratigan invited Jeffrey Saut, chief investment strategist for Raymond James, to explain why he's bullish about the market. Saut said the market, after a few key moves last year and moves in the S&P in the past five days, is poised for a move up. He cited a return of risk appetites and asset allocation shifts out of bonds.
Saut told Ratigan that he's been getting into the market with ETFs and individual stocks with dividends.
Bruce Bond, president and chief executive officer of Invesco Powershares, appeared on the show to talk about two ETFs his firm is launching to invest in mortgage backed securities. The ETFs will focus on non-agency, prime and altA mortgage backed securities.
Bond said these securities, which are back by highly rated senior debt, have been unfairly dragged into the subprime mess.
Ratigan asked Brent Bracelin, senior research analyst for Pacific Crest, to comment on Cisco's earnings report, which come out Wednesday. The IT company is considered a bellwether for the technology industry and could play a pivotal role in determining whether the current tech rally will continue.
Bracelin expects a disappointing report from Cisco. He said his company's industry checks show that IT demand is getting worse and that the pace of the decline is picking up. "We don't look to Cisco to rally the tech space," he said.
He said below $15 is where investors would want to own Cisco for the long term.
He told the panelists that although Cisco's report in large part isn't going to be surprising, what might be a surprise will be the guidance and the magnitude of it.
Jeffrey Harte, a bank analyst for Sandler O'Neill, appeared in a segment that has been running this week on what analysts are doing to size up companies now that a growing number have given up providing guidance.
Harte said he relies first on historical and current data to determine the state of the environment and whether there is going to revenue growth or contraction. He also relies on a slew of data points to come up with quarterly projections.
Ratigan was extremely skeptical whether anyone can figure out the future earnings of a bank. But Harte said it's possible to determine whether the earnings will be up or down.
Harte said he likes
and wouldn't be surprised if Goldman comes of this boasting "20-plus ROE's."
In the final trades, Macke told viewers to trim calls on
. Adami liked
. Finerman liked
Oil Service HLDRs
. Najarian said to go after Cisco by selling puts to buy it lower.
"'Fast Money'Portfolios of the Week" on Stockpickr every Thursday.