Stocks in New York finished in negative-land Tuesday as oil reached a new record and several big names offered bad tidings on the earnings front. The Dow lost 1.5%, the S&P 500 fell 0.9% and the Nasdaq was off 1%.
"Fast Money" TV show, Joe Terranova said that producer price index numbers show that the consumer is hurting. Without a consumer, we've got a problem, he said. He predicted that the market would consolidate from here, pointing out that the S&P 500 bounced down below its 200-day moving average.
Jeff Macke said the consumer information was an excuse to sell. He praised oil and gas magnate T. Boone Pickens for recognizing that oil will go higher from here and getting in on the long side.
Najarian said that
was partially responsible for the market's downturn. He said that with oil near $130 a barrel and gasoline going higher, the economy faces serious trouble this summer.
Terranova said the markets will likely trade sideways from here. He said the
is unlikely to raise interest rates because the consumer is in trouble. Macke agreed that the market will trade sideways from here.
3 Stocks I Saw on TV
var config = new Array(); config<BRACKET>"videoId"</BRACKET> = 1564604992; config<BRACKET>"playerTag"</BRACKET> = "TSCM Embedded Video Player"; config<BRACKET>"autoStart"</BRACKET> = false; config<BRACKET>"preloadBackColor"</BRACKET> = "#FFFFFF"; config<BRACKET>"useOverlayMenu"</BRACKET> = "false"; config<BRACKET>"width"</BRACKET> = 265; config<BRACKET>"height"</BRACKET> = 255; config<BRACKET>"playerId"</BRACKET> = 1243645856; createExperience(config, 8);
Guy Adami said that today marked an occasion to separate the wheat from the chaff. He said that some stocks remained strong on the down day. He said he likes
on today's performance.
Najarian said that tech names
Research In Motion
Oil Pressure Still Rising
Terranova said the rise in oil isn't just speculation. He pointed out that further out at the "back of the board," futures are pricing crude at $140 a barrel. He said the rise in oil is all about supply. Macke said it's not a good idea to short oil.
Terranova advised viewers to get into the drillers. Najarian pointed investors to the
Oil Services HOLDRs
. He said the refiners will not turn for a while.
They Go to Rio
Brazil stocks, as tracked by the
iShares MSCI Brazil
showed gains today. Terranova said that countries that import machinery from the U.S. are a good place to play. Macke said that if the U.S. heads for recession, Brazil will also suffer.
Najarian pointed out that other emerging markets didn't fare as well as Brazil.
went down today despite a solid earnings report from the company. Macke said the hard trade is to get long here. He said he likes the long side here because it's painful.
Najarian said that Macke is right, provided that the housing market is ready to turn. Because he is skeptical of that, he said, he cautioned against getting into Home Depot or
Circling the Wagons
T. Boone Pickens bought 10 million shares of
today. He joins Carl Icahn and other very rich men in an effort to negotiate a deal between the Internet company and
Macke said he doesn't want to be long Yahoo! on this news. Terranova said he agrees with Adami's previous recommendation of Google as a trade on the Microsoft-Yahoo! battle.
The Buck Gets Bruised
In commodities, gold jumped in price today, and the dollar suffered. Terranova said that the dollar is in a trading range here. He said the Canadian dollar may be a good trade on this news. Adami said that Germany's producer price data killed the U.S. dollar, but he thinks that the central banks in Europe will have to cut rates at some point. He said two good commodity plays are
Adami also said
are issuing stock in secondary offerings. He said normally this is bad news, but he recommends buying Nucor's secondary.
Najarian said he believes natural gas has room to the upside. He urged investors not to fight breakouts in names like
. He said coal names are looking bullish as well.
Jon Najarian joined the show to talk about put activity in the financials. He said there is heavy put volume in the
Financial Select Sector SPDR
. He said he doesn't think investors are merely protecting long positions from the downside. He said he thinks the financials will trade sideways from here. He also said emerging markets appear to be rolling over.
The traders discussed ways to play oil without going directly to the sector. Joe Terranova said
has the best collection of oil traders around. Najarian agreed. Adami said Trinity Industries and
are good plays on wind. He also recommended
Hot Couch Potatoes
Macke said that oil prices will keep people at home, so he recommended some couch-potato trades, including
Najarian said he disagrees with Macke, saying that those trades play into expensive commodities.
The traders then discussed the possibilities for
. Najarian said it's an under-the-radar energy play. He said that the company has adapted recently and has promising exposure to photovoltaic technology.
He said that recent positive earnings from
Energy Conversion Devices
mean that DuPont's PV segment will probably get bigger as time goes on.
Adami said DuPont adapts better than any other company and is still cheap on a valuation basis. Macke said it's a better play than the solar-specific stocks.
The traders then spoke with River Twice Research President Zach Karabell about trading inflation. Karabell said that inflation isn't occurring across the board. He said that items that are purchased often are experiencing price increases, whereas low-frequency items are actually experiencing falling prices.
He urged investors to look into irreplaceable inputs, such as iron ore, which leads to stocks such as
Brands can also be irreplaceable inputs, he said. Stocks with powerful brands like Apple,
should do well in this environment, he said.
traded on extraordinary volume today.
Again speaking of plays on summertime activities, the traders discussed some stocks that might benefit from consumers' propensity to barbecue during that time of year. Najarian recommended
, which owns Kingsford Charcoal. Terranova said
might be a good play as the company attempts to get women to wear its shoes.
is interesting on a valuation basis. Macke said investors should look at Wal-Mart.
One viewer asked the traders what was going on in gold. Adami recommended buying Freeport-McMoRan and said he thought the recent rise in gold was a short-covering rally.
Macke counseled another viewer against buying stock in PC companies, saying the sector has had a good run, and it was time to sell when Wall Street analysts went positive on the sector.
Najarian told a third viewer he believes it's OK to buy shipping stocks but recommended following the companies' pricing for their services to better play the sector.
Another viewer had all his money in energy stocks. Terranova recommended taking some profits.
Macke said to buy SPDRs with a tight stop. Adami recommended
Public Service Enterprise Group
. Najarian chose