The markets plunged on concerns about the stimulus package and fate of the automakers.

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The

Dow Jones Industrial Average

fell 297.81, or 3.79%, to 7,552.60, while the

S&P 500

dropped 37.67, or 4.56%, to 789.17. The

Nasdaq

fell 63.70, or 4.15%, to 1,470.66.

Pete Najarian said on

CNBC

's "Fast Money" TV show that it's important for investors to buy protection in this tough market. "That's the only way you can sleep at night," he said.

Tim Seymour also told viewers to keep their portfolios "light and lean." Najarian cautioned investors not to blindly jump into the market in the belief that this might be a bottom.

Guy Adami said the S&P appears to heading toward 740.

Dylan Ratigan, the moderator of the show, asked the panel how they would trade off the stimulus package signed by President Obama today. Najarian said he liked energy names such as

Energy Conversion Devices

(ENER)

, and

First Solar

(FSLR) - Get Report

.

Seymour liked

PowerShares Water Resources

(PHO) - Get Report

as a water purification play.

Adami liked the prospects for

URS

(URS)

, an engineering firm that gets 90% of its revenue in the U.S.

Najarian said China could offer an opportunity because $85 billion of its stimulus is going toward energy such as a power grid, coal fired plants, nuclear energy, solar energy and wind energy.

Ratigan said gold and health care stocks continue to work in this market. Najarian liked

SPDR Gold Trust

(GLD) - Get Report

and

Market Vectors Gold Miners

(GDX) - Get Report

.

In the health care sector, he liked

Medtronic

(MDT) - Get Report

, which beat earnings, gained in some areas in the latest devices and enjoyed a 10% rise in its cardiovascular unit.

Ratigan brought in Phil Lebeau, CNBC's auto reporter, to talk about a tentative agreement between United Auto Workers and the automakers. Lebeau called it a significant agreement, saying it could go a long way to narrow the pay gap between domestic and foreign automakers.

Lebeau said the reports of further bailout money for the automakers means it will cost more to turn around their business. He said the Obama auto team will be pressing them for details about their plans to become viable.

Wal-Mart

(WMT) - Get Report

was one of the few bright spots in the market. Deborah Weinswig,

Citigroup

(C) - Get Report

retail analyst, is bullish on the stock because it beat its estimates and delivered on its 2009 outlook and stock repurchasing efforts.

She said she was particularly encouraged by Wal-Mart's decision to increase spending in advertising. "It really looks like they are going after market share," she said.

Ratigan and the panel were taken back by Warren Buffett's decision to sharply cut its stake in

Johnson & Johnson

(JNJ) - Get Report

. Najarian wondered what Buffett was seeing that he wasn't seeing. He sees a company that is diversified, making acquisitions and has a strong pipeline.

Ratigan brought in Jeremy Zirin, a senior equity strategist for

UBS

(UBS) - Get Report

Wealth Management, to make an argument for the nationalization of banks.

Zirin said nationalization will be needed for those banks short on capital. But he said what is really needed is for the government to backstop the losses from bad assets in order to attract private capital.

Joe Terranova talked briefly about investments outside of stocks such as those in commodities and currencies. In particular, he cited a favorite of his:

CurrencyShares Canadian Dollar Trust

(FCX) - Get Report

, which he said is a great way to go long on energy without incurring the volatility and other problems of the stock market.

With Obama set to let the stem cell funding ban, Najarian said to check out companies involved in embryonic stem research such as

Celgene

(CELG) - Get Report

,

Geron

(GERN) - Get Report

and

Teva Pharmaceutical

(TEVA) - Get Report

.

Seymour talked about the growing euro crisis as Eastern European countries default on loans from Western European countries. He said this is affecting banks and insurers and has global implications.

In the final trades, Adami said to look into Johnson & Johnson if it goes down 2%. Finerman said she liked

Foot Locker

(FL) - Get Report

. And Najarian said he liked

HP

(HPQ) - Get Report

.

"Check out

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