'Fast Money' Recap: Is the Market Heading Lower?
Weak economic news sent the markets downward Wednesday.
The
Dow Jones Industrial Average
fell 52.81, or 0.62%, to 8,422.04, while the
S&P 500
was off 4.66, or 0.51%, to 903.47. The
Nasdaq
lost 6.70, or 0.39%, to 1,727.84.
Melissa Lee, the moderator of
CNBC
's "Fast Money" TV show, said the markets saw a 100-point rally fizzle as the financial stocks fell in the final hour.
Joe Terranova said today's trading session is what a "consolidating" market looks like, with declining volatility and energy names holding.
Pete Najarian said the commodities were soaring, with the ag names on fire and copper, steel and coal names looking very strong.
Guy Adami wasn't encouraged by today's market action and said the market is heading lower. Terranova picked up on Adami's comments, saying that market could head lower if the rug is pulled from the energy sector.
Pete Najarian said he was concerned about oil prices heading above $60 a barrel because that is when it starts hitting people's pockets and causing a decline in the personal savings rate, which had been around 8%. He said he would rather see oil at $50 to $60 a barrel.
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Lee brought on Tim Seymour to talk more about the run-up in the commodities. Seymour said the numbers from the API and DOE show there are signs of demand for oil. He said the incidents of supply disruption also tell you that investors are back, and that gold and oil, two prominent trades last year, are starting to make a move.
Adami said he believes the run by
Potash
(POT)
is over after the stock closed today at $114.23, after reaching a high of $118.32 during the day. He said it's especially rich now.
Similarly, Macke said he sold his shares of
Agrium
(AGU)
, which has soared from $29.79 on March 2 to $50.95 at the close of trading Wednesday.
Both Terranova and Seymour said the commodities are breaking out, with Seymour adding commodities "are not expensive here."
Shifting to the financials, which sold off late in the session, Adami said the financials did not trade well, adding he was particularly discouraged by the performance of
Goldman Sachs
(GS) - Get Goldman Sachs Group, Inc. Report
and
Wells Fargo
.
He also touched on
Jefferies
(JEF) - Get Jefferies Financial Group Inc. Report
, which has enjoyed a nice run-up, but he said he wouldn't chase the stock at these levels.
Commenting on the tech stocks, Najarian noted a lot of activity in the chips, in particular
Analog Devices
(ADI) - Get Analog Devices, Inc. Report
, up 15.65%. He said a common theme among Analog Devices,
Cisco
(CSCO) - Get Cisco Systems, Inc. Report
and
IBM
(IBM) - Get International Business Machines Corporation Report
has been the development of the smart grid.
He also had an eye on
NetApp
(NTAP) - Get NetApp, Inc. Report
and its move to buy
Data Domain
(DDUP)
for $1.5 billion. He saw the move as further sign of consolidation in the tech industry.
Steve Liesman, a
CNBC
reporter gave a brief rundown on the
Fed
's report today. He said the Fed downgraded its economic forecast for 2009 and 2010 and made some guarded optimistic comments on a "tentative rebound" and "signs of stability."
Margaret Brennan, another
CNBC
business reporter, provided a preview of
Gap
before its earnings report Thursday. She said she doesn't expect an earnings surprise. She did say investors will be looking where the growth will be for the retailer and whether its Old Navy division will play a role in that. She said the company has done a good job of cutting expenses.
Adami said the Gap story is one of efficiency and advised against initiating a trade on the stock, which is up 19% this year.
Lee shifted the discussion to coffee futures, which hit a 7-month high and is putting price pressures on
Starbucks
(SBUX) - Get Starbucks Corporation Report
and
McDonald's
(MCD) - Get McDonald's Corporation Report
. Terranova says coffee can move even higher.
Whitney Tilson, of T2 Partners, came on the show and painted a dire picture of the housing meltdown. He doesn't see any relief in sight, saying the unwinding of the credit crunch is in the fifth inning and the housing meltdown in the seventh inning.
Tilson said commercial real estate is in serious trouble because of refinancing problems.
In the Rising Star segment, Bahram Akradi, CEO and founder of
Life Time Fitness
(LTM) - Get LATAM Airlines Group SA Sponsored ADR Report
talked about the resiliency of his company, which hasn't seen a decline in membership during the tough economic times.
In the final trades, Macke was long Life Time Fitness. Terranova was for
Genzyme
(GENZ)
and Najarian liked
Pfizer
(PFE) - Get Pfizer Inc. Report
.
"Check out
"'Fast Money'Portfolios of the Week" on Stockpickr every Thursday.
